Every cryptocurrency today is judged against Bitcoin, probably because the latter is the most popular crypto right now. Bitcoin offers limited privacy because it is publicly accessible. Even pseudonymous addresses are not fully private.
A few transactions carried on by a participant over time can be linked to the same address, allowing the possibility of others to become aware of an address owner’s trends and their identity.
Another advantage of Monero over bitcoin is fungibility, which means that two units of a currency can be mutually exchanged with no difference between them. Thus while two $1 bills are equal in value, they are not fungible, as each carries a unique serial number. But, two 1Kg gold bars of the same quality are fungible, as both have the same value and don’t carry any distinguishing features. Using this analogy, a bitcoin is the $1 bill, while a Monero is that piece of gold.
The transaction history of each bitcoin is recorded on the blockchain. It helps to identify bitcoin units that may be linked to illegal events. Monero on the other hand, offers a non-traceable transaction history, which permits participants a much safer network without the risk of having their held units be refused or blacklisted by others.
Challenges
Privacy concerns are the fundamental reason for Monero’s popularity but that doesn’t mean that it comes without its challenges. The non-traceability and privacy features are used for illegal purposes and at questionable marketplaces, including those like drugs and gambling.
This is one of the reasons why markets that were popular on the dark web, showed increased use of Monero before they were shut down.
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