Monero has faced a number of controversies over the years as have many stablecoin networks and tokens and much is debated about the future of privacy tokens like Monero as well as whether they solve problems or create new ones.
Monero is an open-source blockchain which means that anyone who wishes to make use of it can do so and it is compatible with most operating systems on the market. This ensures accessibility for all potential users as well as a certain level of transparency. Monero as a cryptocurrency can be used for payments or can be held as an investment tool just like any other cryptocurrency.
Monero use cases and applications
Perhaps Monero’s most famous use is as a privacy token. Traditionally, cryptocurrencies such as bitcoin work with the public ledger system in which all transactions are stored and publicly accessible at any time. This means that the transactions that have taken place across public blockchains are accessible to the public and details can be accessed about the transactions that have taken place from a specific wallet address. Monero circumvents this problem by making sure that all transactions cannot be traced through the use of repeatedly generated addresses. In a typical blockchain system, when an individual wants to receive funds, they present the sender which their publicly available wallet address. This means that in traditional blockchains, anyone with a public blockchain address can access all transactions that were made from that address as well as how much is held in the wallet.
Monero is able to prevent this by creating various wallet addresses. If a user wishes to, for example, receive funds from another user, the Monero ecosystem will generate a new address for each transaction that works a single time. Also, if a person is receiving funds from a Monero wallet, they will be given a generated address and will only know that an amount of money was sent but not the financial standing or the actual wallet address that sent it. This is appealing to a number of people as many do not like the idea of their financial standing being public knowledge at any given time, particularly If they are engaging in some form of business.
Should you wish to carry out crypto transactions that rely greatly on the idea of privacy, Monero would be a good idea to fulfill this purpose. It is also worth noting that Monero makes use of a process called ring signatures to conceal the identities of those who send cryptocurrency. This is done by mixing several different wallet addresses as the possible originator of the transaction and thus, the recipient does not know which address actually sent the funds as some might even be off-line at the time. One of the reasons why this is done is to prevent tracing of specific transactions. For example, when funds are being used for criminal purposes or have been stolen, the use of a public blockchain can trace the wallets that have received and sent such funds but in the case of Monero, this cannot be determined. This has made Monero a tool of choice for those who wish to conduct their business very privately but it has also been very controversial because of its use for criminal activity.
The Future of Monero
There isn’t a lot of emphasis on the use of Monero as a platform for the creation of decentralized applications or smart contracts. Most of the focus of the Monero system seems to be on the cryptocurrency itself. It is rather stable in terms of market price and is arguably the most popular privacy coin on the market. However, the future of Monero is likely tied to the future of cryptocurrencies which are gaining traction as time goes on, but also the future of privacy coins.
Privacy coins are very controversial as they have been used for criminal purposes in the past and have been demanded as a form of ransom by nefarious characters in the past. They are also often preferred by criminals in transacting their activities as they are much less likely to get caught compared to if they used traditional coins such as bitcoin. Naturally, privacy coins have been featured in a number of cases such as a kidnapping case in Norway as well as crackdowns on the dark web. Privacy coins have therefore drawn great criticism both within and outside the cryptocurrency industry and some speculate that regulation could be put in place to limit the use of privacy coins to avoid criminal activities.
In the meantime, however, it is likely going to continue to see support from its user base who are very passionate about it. Some of this passion stems from the fact that some believe that, philosophically speaking, all cryptocurrencies should be untraceable to a degree as complete privacy in terms of financial transactions is one of the things that drew some people to cryptocurrency. While crypto is not likely going anywhere in the near future and while the future of privacy coins as a whole is not defined, Monero will likely continue to see user support due to its privacy and heightened security.
