In 2011, a unit of Bitcoin (BTC) was worth USD 1, and not a lot of people believed that cryptocurrency has the potential to disrupt established financial systems. In 2021, each unit of BTC is worth around USD 57,000. And the people who put their money on the digital currency early on and held on to their investments are reaping the rewards of the risk they took a decade ago.
Cryptocurrency has also become a buzzword, and many would-be investors are more than eager to discover and put their money on what could be the next Bitcoin. However, there are tens of thousands of cryptocurrencies that are available in the market today, and it’s not an easy task to determine which of these digital coins will have the same growth potential that BTC exhibited in its first few years.
Monero (XMR) is a cryptocurrency that niche groups are expecting to follow Bitcoin’s lead, and indeed, the coin has been flourishing lately. From costing around USD 13 in January 2017, the price of 1 XMR unit now ranges between USD 110 and USD 500. XMR is also pretty easy to get into, as users only need capital, a decent computer, stable internet access, and the best XMR wallet—XMRwallet.com is a good option—to start acquiring Monero.
Buying XMR is pretty easy, but should you invest in it like it’s the Bitcoin of tomorrow? While no one can say with absolute certainty that XMR will reach BTC-levels in the next few years, there’s a good chance that the demand for the currency will grow considerably in the near future. Here are some of the reasons why.
Monero Improves on the Privacy Issues that Bitcoin Has
Released in 2014, XMR provides a private, anonymous, and fungible alternative to BTC, which was made available 5 years earlier. While BTC can be traced, XMR is specifically designed to be non-traceable. The privacy technologies behind the coin obscure the sender (via ring signatures), receiver (via stealth addresses), and amount of the transaction (via ring confidential transactions). The owner can choose to let others peek at their transactions by using a key, but there’s no way for outside parties to trace the origin and destination of an XMR transaction. This means that Monero can be used to pay for services and products without worrying about being censored by government or financial agencies.
Like fiat money, digital currency is a tool, and users who own a tool that cannot be controlled by the authorities have more options at their fingertips. If, for example, you want to show support to a cause that your circle actively hates, you can send an anonymous donation using XMR so that it cannot be traced back to you. You can also use the currency to start a new life elsewhere without leaving a financial trail that the people you left behind can follow. How you use XMR will be up to you, but you can rest assured that the transactions you carried out using the currency will remain private and untraceable—qualities that you can’t find in most other cryptocurrencies.
Monero Investors Enjoy the Benefits of Fungibility
An item is said to be fungible if it is interchangeable with other items that are similar to it. If you exchange one gold coin for another gold coin with similar qualities, then you probably won’t be able to tell which one is which, nor would it matter. A dollar bill is fungible, in a way, because it can be exchanged for another of the same value, but it’s still possible to tell it from the others by comparing the bills’ serial numbers. XMR provides its users with true fungibility, as its units are indistinguishable from others. As such, the authorities cannot ban an XMR unit without banning the currency altogether.
Data Privacy Can Become a Privilege in the Coming Years
It can be quite a challenge to take charge of your private information in a highly interconnected world. Whenever you pay for a service or goods using your cards, the entity you’re transacting with, as well as the financial establishment where you store your fiat money, will also collect your personal information. This can include your location, the brands and products you prefer, or even the kind of music you like listening to. This information will then be used to create other products, like targeted advertisements that are designed to capture your attention. Not everyone wants to take part in such a system.
People who don’t want to be traced by anyone will want to use an anonymous currency that allows them to pay for their purchases without sacrificing their privacy. This is where XMR shines. This digital currency allows people to complete their transactions without revealing anything about the people that are involved in the said exchange. The need for privacy, in turn, can help increase the demand and price of XMR.
If you’re interested in a currency that protects your privacy and anonymity and currently addresses the needs of future consumers, then Monero will certainly be worth your money. It’s uncertain if it will rise to the same heights as Bitcoin has, but the potential is definitely there.
Also Read: Can You Still Get Free Bitcoins In 2021?