Monero for beginners: A step-by-step guide to XMR | finder.com
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What is Monero? A step-by-step guide to XMR

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If you’re looking for a secure, anonymous, and untraceable currency, you should consider whether Monero has you covered.

Monero (XMR) appears to have become synonymous with anonymity and secure transactions. While many people believe that bitcoin is already anonymous, this is definitely not the case as we’ll see in this guide. The anonymous nature of bitcoin is very much up for debate and Monero is the natural outcome of that debate.

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What is Monero?

IconSymbolInitial release dateAlgorithm typeMax. supply
XMRApril, 2014CryptoNight18.4 million XMR

Rising from a need identified by developers to make a more secure, anonymous and untraceable cryptocurrency, Monero was released in April 2014. It presents itself as standing for three core values:

  • Security. Without trust, no cryptocurrency can survive and none of them are more reliant on that trust than Monero, whose users not only trust it with their money but also with keeping their transactions anonymous.
  • Privacy. Monero claims that they need to be able to protect their users’ anonymity, even in a court of law – including, as their website states “in extreme cases, from the death penalty”.
  • Decentralization. Monero isn’t run by anyone. It’s unlike some other coins where there’s a central agency that runs the network, or blockchain. In the case of Monero, not only does this central, controlling agency or business not exist, but the development decisions and the developer meeting logs are published and available online for anyone to see.

How is Monero different from bitcoin?

Monero focuses on anonymity, and this is where it diverges significantly from bitcoin. Many believe that bitcoin already is anonymous, but that’s just a very common misconception, as we’ll see.

The problem with public transactions

Bitcoin is built over what is known as the public ledger, or blockchain. This was done so that users of bitcoin can verify other people’s transactions, especially in cases where these payments need to be transparent (e.g., government spending and not-for-profit organizations (NPOs).

The issue is that once you share your bitcoin address, all past and future transactions and how much money you’re sending/receiving will always be linked with you. Buyers may not always find this desirable. It’s not only an issue of revealing that users may be purchasing or paying for illegal services/products. You just might not want your employer to know that you sent money to WikiLeaks, or maybe you don’t want to have freelance clients know how much you’re charging other clients.

Bitcoin’s solution

Bitcoin did come up with somewhat of a temporary solution or a user guideline, so to speak. The idea is that whenever you’re requesting money from someone you should always provide them with a temporary wallet address. This address is related to your actual wallet but would be a one-time-use address and then will be destroyed, making it harder to trace your wallet’s main address back to you. This solves the problem for one-off payments, but organizations and businesses who want a public address visible on their website, for example, would still have all their transactions traceable back to them.

Monero presents a solution to this problem by using what is known as ring signatures and stealth addresses.

Ring signatures

Monero mixes addresses for a user’s transactions with another user’s addresses making the path between sender and receiver virtually untraceable. Analysis of the Monero blockchain would reveal nothing more than a cryptographic hash of the transaction.

Stealth addresses

Similar to the explanation of bitcoin’s suggested solution, Monero hides addresses behind one-time-use ones, which are then destroyed so that the transaction cannot be traced back to a public address.

Today’s Monero price

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Updated: 21 Jul 2018 19:38:42 UTC

Where can I use Monero?

Many of the merchants that currently accept bitcoin and the other more common cryptocurrencies already accept Monero.

How do I buy Monero?

Here’s a list of exchanges for you to consider:

Name Product Deposit Methods Fiat Currencies Supported Cryptocurrencies
Cryptocurrency
BTC, XRP, USDT, ETH, NEB, XVG, TRX, NEBL, ETH, NEO, FUN, ETC, BCC, POE, DASH, ELF, ICX, BNB, ZRX, APPC & 80+ more
Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.
Cryptocurrency, Wire Transfer
New account holders must now deposit fiat/crypto equivalent to US$10,000 to trade.
USD, EUR
BTC, BCH, BTG, IQ, TRX, GNT, AVT, DASH, DATA, EDO, EOS, ETC, ETH, ETP, LTC, MIOTA, NEO, OMG, QTUM, SAN, USDT, XMR, XRP, ZEC, BAT, ZRX, FUN, MANA, SPANK, TNB, RLC, RCN, REP, ELF, AID, SNGLS, SNT, QASH, YOYO, MITH
Spot trade all of the major cryptos on this full-featured exchange and margin trading platform.
Credit card, Debit card
USD, EUR, RUB
BTC, BTG, BURST, BYC, CANN, CFI, CLAM, CLOAK, CLUB, COVAL, CPC, CRB, CRW, CURE, CVC, DASH, DCR, DCT, DGB, DMD, DNT, DOGE, OMG & 140+ more
Use your credit or debit card to buy bitcoin and other cryptocurrency without having to verify your identity.
Kraken Cryptocurrency Exchange
Electronic Funds Transfer, SEPA, Wire Transfer *payment methods vary per country
USD, EUR, GBP, JPY, CAD
BTC, BCH, ETH, ETC, XMR, DASH, LTC, XRP, XLM, REP, ICN, MLN, ZEC, USDT, GNO, EOS
Exchange multiple cryptocurrencies through a range of payment methods, including Electronic Funds Transfer, SEPA or Wire Transfer.
Bithumb Cryptocurrency Exchange
Cryptocurrency, Wire transfer
KRW
BTC, BTG, BCH, DASH, ETC, LTC, EOS, XRP, ETH, QTUM, TRX, ICX, VET, XMR, ZEC, MITH
A global platform where users can make KRW and cryptocurrency deposits to purchase up to 15 popular cryptocurrencies.
Bittrex Digital Currency Exchange
Cryptocurrency, Wire transfer
USD
BTC, ETH, XVG, SC, XRP, DOGE, STRAT, XMR, ADA, OMG, ETC, BCC, XLM, DGB, UKG, QTUM, ZCL, RDD, LTC, NEO & 120+ more
Buy from one of the largest cryptocurrency exchanges with a selection of over 190+ cryptocurrencies and 3 USD pairings.
Poloniex Digital Asset Exchange
Cryptocurrency
-
BTC, ETH, XRP, DOGE, XLM, ETC, STRAT, LTC, SC, DGB, BCH, LSK, XMR & 50 more
Trade various coins through a global crypto to crypto exchange based in the US.
Exmo Cryptocurrency Exchange
Credit card, Debit card, Cryptocurrency, Perfect Money, SEPA, Wire Transfer, Payza, CryptoCapital, Money Polo, Payeer, Giropay, Yandex Money & more
USD, EUR, RUB, PLN, UAH
BTC, BCH, ETH, ETC, XRP, KICK, DASH, WAVES, ZEC, XMR, LTC, DOGE, USDT
A UK-based cryptocurrency platform that provides buyers with a wide variety of payment options.
Qryptos Cryptocurrency Exchange
Cryptocurrency
-
BTC, BCH, DRG, UKG, LIKE, ENJ, TRX, LDC, MGO, AMLT, EZT, LALA, IPSX, FLIXX, STU, 1WO, TPAY, ETH, WIN, LTC, SPHTX, RKT, UBTC, ETN, ECH, QASH, NEO, HAV, XRP, ETC, STAC, FLUZ, VZT, XEM, XLM, VET, BMC, ONG, FDX, XMR, DENT, MCO, IND, GAT, ZEC, CAN, STX, QTUM, OAX, IXT, STORJ, MTN, REP, FCT, DASH
Owned by the team behind QUOINEX, QRYPTOS is a global crypto-to-crypto platform which supports over 50 cryptocurrencies and offers negative trading maker fees to generate liquidity.
Mercatox Cryptocurrency Exchange
OKPay, PerfectMoney, Yandex Money, Payeer, QIWI, Cryptocurrency
USD, EUR, RUB
BTC, XRB, ETH, DCN, BCH, NIO, TRX, DASH, COB, DOGE, PRIX, DSR, XCPO, LTC, VERI, LOC, NUA, PKT, PPT, ICO & 80+ more
Supporting over 100 coins, you can exchange a variety of cryptocurrency pairs on this peer-to-peer platform.
Credit card, Debit card
USD, EUR
BTC, BCH, ETH, XMR, ZEC, DASH, XRP, ETC, LTC, DOGE, XLM,1ST, ADX, AMP, ANT, BAT, BCN, BNT, BTG, CFI, CVC & 70+ more
Access competitive crypto-to-crypto exchange rates for more than 35 cryptocurrencies on this global exchange.
Livecoin Cryptocurrency Exchange
Cryptocurrency, Payeer, Perfect Money, Qiwi
USD, EUR, RUB
BTC, BCH, ETH, LSK, LTC, XMR, XEM, DASH, BCC, DBIX, CLOAK, EMC, NEO, TIME, SHIFT, STRAT, DOGE, DTR, DGB, VOX, ESC, MONA & 140+ more
Trade at an exchange that has an extensive offering over 160 coins and numerous fiat and altcoin currency pairs.
Cryptopia Cryptocurrency Exchange
Cryptocurrency
-
BTC, BCH, ETH, LTC, DOGE, NEO, XMR, POWR, DASH, PIVX, XEM, OMG, GNT & 500+ more
Buy and sell hundreds of cryptocurrencies with minimal verification on this all-in-one, New Zealand-based exchange.
ShapeShift Cryptocurrency Exchange
Cryptocurrency
-
BTC, BCH, BTG, ETH, ETC, FUN, 1ST, ANT, BAT, BNT, BLK, CVC, CLAM, DASH, DCR, DGB, DNT, DOGE, EDG, EOS, FCT, GAME & 25+ more
A global exchange where no account is needed to begin trading cryptocurrency to cryptocurrency.

Compare up to 4 providers

Using Monero to transfer money

Sending and receiving money with Monero is very similar to other coins, although XMR transactions are thought to be more secure. Here’s how installing a wallet and receiving money works:

  • Start with an XMR wallet. Some wallets let you have multiple different currencies stored in them. When working with XMR, you should ideally get the official wallet to avoid any conflicts and leakages of anonymity.
  • Store the seed. During the process of installing the wallet, you’ll get a 25-word mnemonic word seed. It’s imperative that you keep these words secret and safe. If your computer ever breaks down, they will be your only method of getting back your XMR.
  • Get your address. Your wallet will give you a Monero address. This is the address you will use to receive money. Share this address with your sender and they will send you money. While this address will always technically remain the same, on the Monero blockchain this address will be hashed and obfuscated and only you and the sender will know the actual address.

Can I make money with Monero?

The possibility of making money with Monero is very similar to the options for making money with other currencies. After all, the main difference is Monero’s focus on security and anonymity. Everything else is very much the same as other coins, such as bitcoin. Also the same is the need to consider the options carefully and make a wise decision.

Transactions in XMR

The best way to make money from a cryptocurrency is to buy it, provided you are satisfied that it’s the best plan for you. Buying XMR and paying in XMR should help the currency grow, and when the currency grows, your wallet should also increase in size.

How your wallet grows with the coin’s value

If you’re investing in cryptocurrencies in order to make money and little else, then understanding the way currency trading works (including things like FOREX) is imperative.

Say that 90 days ago you wrote an article for a business and they decided to pay you in Monero (XMR). 90 days ago, 1 XMR cost $55.30. You wanted to get paid $60 for your article, so you charged the business 1.08499 XMR. This amount goes into your wallet and you move on.

90 days later, today, you decide to withdraw that money from your wallet. But today, 1 XMR costs $121.17. This means that your wallet now has a value of $131.47 instead of $60.

Congratulations! You just bought cryptocurrencies and more than doubled your money!

Be aware, though, that XMR can go down as well as up, and caution is recommended.

What to watch out for

No cryptocurrency is without its concerns, and Monero is no different.

  • Mining Centralization
    Mining is currently controlled by 4 large pools. While no particular pool controls more than 20% of the entire hash rate, this is still a problem as decentralization is of utmost importance. Luckily, the Monero development team has stated that this is as important to them as to Monero users. Because a hack on a blockchain requires convincing 51% or more of the users that your data is the correct one, with only 4 pools you would only need to hack 3 mining pools to control 60% of the blockchain, at which point you control the entire blockchain.
  • Large Transactions
    Because Monero has to add overhead to every transaction to make sure they’re anonymous and secure, the system is quite noticeably slower and the transactions are larger and consume more space on a user’s computer.

What’s next for Monero?

Monero should be watched for its growth potential and whether the developers are placing a focus on decentralization and security.

We are told that in the works is a bigger effort to push adoption by merchants – especially in certain areas of the world where adoption has been slow – and a better platform for developers to build upon.

Frequently asked questions

Image sources: Shutterstock, CoinMarketCap

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2 Responses

  1. Default Gravatar
    pawanApril 22, 2018

    I am doing mining from several days and using monero wallet. i am not able to see my monero balance in wallet when signing in with secret key. however i am able to see my balance when I am searching with my wallet address in pool website (nanopool) search bar also able to see worker machines details.
    can you please explain why this is happening

    • finder Customer Care
      JoshuaApril 23, 2018Staff

      Hi Pawan,

      Thanks for getting in touch with finder.

      One of the most common reasons this may happen is a failure to sync. You may want to wait for about 24-48 hours more to see whether your missing balance will reflect your account or not.

      Another reason is that you Monero isn’t mined directly to your wallet. It’s held in the pool and you will only see it until you exceeded the minimum payout amount.

      Please note that we are not affiliated to any cryptocurrency wallet. Thus, we can only offer general advice. You might want to directly get in touch with your wallet’s developer or someone else who might have the right knowledge to help you. You may also want to search the Internet or join forums to get a more personalized answer.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

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