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Bitcoin versus Monero: Privacy and Transparency Compared

You’ve probably heard Bitcoin compared with Monero. These two are both digital currencies. But which of them is better?

To start, Bitcoin is open source and is known for being decentralized. Meanwhile, Monero prides itself on being private and anonymous. It has become popular with crypto miners and shoppers who prefer extreme anonymity.

At this point, comparing Bitcoin to Monero still doesn’t make as much sense if you are merely starting your cryptocurrency journey. After all, Bitcoin is still the most popular cryptocurrency in the market.

Of course, experienced traders know that other options exist and are growing. It is why there’s even a comparison with Monero.

This article will not only focus on the coins, Bitcoin and Monero, alone. It will also compare a Bitcoin mixer and Monero on their own.

What is Bitcoin?

Still reasonably young, Bitcoin holds the title of being the world’s first cryptocurrency. Satoshi Nakamura launched it in 2009.

As mentioned in passing earlier, it uses a decentralized computer network when verifying users and their chosen transactions in a secure manner.

The cryptocurrency was launched to do away with a third party when exchanging digital currency. Not only is its code open to the public, but it also amps its transparency by allowing its users to use a public database to trace transactions.

Bitcoin (BTC) is the native currency used in almost all cryptocurrency exchanges. Users mine it on the blockchain with the help of a Proof-of-Work algorithm. This algorithm rewards users who conduct as many transactions as possible to form a new block.

Perhaps because it is the oldest and most popular cryptocurrency, Bitcoin is known for its crawling networks. However, it doesn’t mean that it remained on that level. Recent upgrades have delivered faster transactions and sturdier addresses.

What is Monero?

Monero (XMR) is five years younger than the Bitcoin and was launched in 2014. Its Proof-of-Work algorithm is based on Nicolas van Saberhagen’s CryptoNote-white paper.

Because it was launched after Bitcoin, it makes sense that its protocols were formulated with Bitcoin’s protocol issues in mind.

Monero’s blockchain may have been based on open-source code, but it works more efficiently. It also has a thicker layer of privacy for those who want their transactions to remain anonymous online.

Despite how it is designed to lean toward anonymity, users can still choose to provide third-party wallets or app keys. So, they are passing on more details about the sender and receiver of each transaction involved.

Monero is backed by the third largest group of developers in the world of cryptocurrencies. With this, it has the benefit of active development, which assists in providing regular and consistent improvements. Users can then be assured of its stability for the long term.

In-Depth Examination of the Two Currencies

Spread and Acceptability

While Monero certainly has an excellent privacy advantage, it is still not as prevalent as Bitcoin.

Yes, you can get both of them from their blockchain clients. However, Bitcoin is still the cryptocurrency to go to if you want something you can get from any exchange. It is, after all, the default cryptocurrency. Older and better accepted, Bitcoin is ubiquitous.

If you want to trade Monero, on the other hand, you must first look at crypto lists that will be exchanging it. It is not accepted everywhere.

Speed

It was mentioned earlier that Bitcoin is slower than Montero. However, because of its popularity, it is backed by many developers. These developers continue to work to find ways to improve its speed and deficiency.

Because of the developer support, Bitcoin has faster confirmations and is compatible with more payment systems. That is why most businesses prefer working with this cryptocurrency.

Naturally, Monero may seem to be faster. However, several blocks are made first so that you can best appreciate its benefits. Why? Well, these blocks allow your transactions to become irreversible.

To be irreversible, however, the user must wait about half an hour to receive safe confirmations. Of course, the Monero developers have been working hard to make transactions speedier. They have released Bulletproof protocols to do just that. At this point, though, it still cannot surpass what Bitcoin can do.

Privacy

As mentioned earlier, Monero is better at keeping its transactions anonymous than Bitcoin and most cryptocurrencies.

Monero uses several networking techniques and cryptography to hide users’ data during each transaction. It mixes decoy outputs with ring signatures, which allows nodes to enable transactions to push through.

The cryptocurrency also uses stealth addresses that hide the coin owner’s identity. Its Dandelion protocol hides IP addresses.

You will appreciate these characteristics better knowing that Bitcoin keeps its transaction details public. You can even easily trace a Bitcoin user or the transaction he performs.

Mining

Bitcoin is well known for its ability to be mined. Montero has the same feature.

Although Bitcoin has many developers constantly working to improve it, it still has issues regarding the speed of mining and electricity used to perform the task.

Because of this, it is often expensive for the average user to mine Bitcoin. They will also require powerful hardware. The processors will use even more electricity if the network uses dedicated hardware to perform mining, e.g., ASICs.

Even the beginning Bitcoin trader knows that a regular computer cannot compete against data mining farms. So, it is well-known that Bitcoin mining can be a little limiting.

On the other hand, Monero uses a lighter mining algorithm. Because of this, you can set up more power-efficient mining at your home.

Scarcity and Value

In cryptocurrency, value is related to supply.

Bitcoin is scarce. So, it comes with a higher value. One coin will increase its dollar value until the supply is adequately distributed.

Prices in BTC will decrease if Bitcoin becomes more accepted in more venues. It currently stands at approximately over 20000 USD. The value has fluctuated since its inception in 2009.

As a cryptocurrency that doesn’t have as much reach as fiat currencies, Monero is also higher in value compared to the USD. At this point, though, its price is about 150 USD per coin. That is a lot less than Bitcoin’s price.

Monero will continue at its rate because its increase in coins seems to be guaranteed over time. Its further increase will depend on how its anonymity feature is perceived in transactions.

So, users are pondering whether Monero can offer more than its value.

Trust and Reputation

Though cryptocurrencies have created financial freedom you may not experience in fiat currencies, they still divide people’s opinions. It was especially true at the beginning.

Unfortunately, cryptocurrencies often carry a bad reputation. Because some traders have failed in their new venture, they sometimes spread the wrong information about them.

Because of the misinformation spreading online, some people think they are nothing more than Internet scams. You cannot blame them because cryptocurrencies are less tangible than fiat currencies.

Other concerns about cryptocurrencies include their perceived illegal activities, which were thought to be happening on the Dark Net. Environmentalists also talked about their carbon footprint.

Because Bitcoin has been around for more years, it is considered more reputable than Monero.

Bitcoin’s reputation has been on the rise. It has even been considered legal tender in the Central African Republic and El Salvador. It doesn’t matter that it is traceable. It allows the authorities to trace various transactions. They are also capable of blocking some users from using the particular coin.

The privacy that Monero is proud of may also be its downfall in some cases. It may attract criminal networks found on the Dark Net. Because of this, regulatory authorities are focusing on it to the point that exchanges are removing Monero and other privacy coins from their lists.

Still, some users find Monero’s privacy attractive. It allows them to avoid getting trapped by cryptocurrency blockades. Meanwhile, Bitcoin users are often affected by strict regulations. Monero owners may be able to get around these restrictions.

Which One Will Work for You?

The best question is probably not which is better but which works best for you.

The above discussion shows you how Bitcoins and Monero coins work. So, you can inform your decision with each detailed comparison.

Bitcoin may be the more familiar, safer answer, especially if you want to use it for regular transactions, such as online shopping.

However, if you would instead value your privacy in terms of online transactions, you could be better off with Monero.

Is this the end of the discussion?

No, it isn’t. Another way to secure your Bitcoin and Monero transactions is through cryptocurrency mixers.

What is a crypto mixer?

No matter how private a crypto coin is supposed to be, the sender does not always remain unidentified. So, confidential transactions may not be as secret as users think.

Public administration controls sometimes allow transactions to be identifiable. A user’s electronic address can be identified online. It’s even possible for you to be unmasked online.

It’s why Bitcoin requires a Bitcoin mixer or Bitcoin tumbler. Mixing/tumbling services are not limited to Bitcoin, either. You can do it with Monero, as well.

What is a Bitcoin Mixer?

A Bitcoin tumbler is software that splits the transaction, creating different parts that can be blended with other coins. So, it makes it difficult to trace the transaction to the user.

All transactions can be tracked without a mixer because they leave imprints in the blockchain. This protective feature prevents money laundering, buying weapons or drugs online, and other illegal activities.

Is Using a Crypto Mixer Illegal?

Some Internet users believe that using a coin mixer is illegal in itself. However, it isn’t true. While using crypto mixers can lead to illegal activities, it is not a criminal act.

You do have to be careful when choosing a service.

How to Choose a Reliable Mixing Service

  1. You should be paying an insignificant percentage as your fee, at approximately 1 to 3%.
  2. There will be no records of your online transactions. It means that your identity is secure and non-traceable.
  3. The use of a variety of outgoing addresses can help reduce risks. The coins blended with different types are assigned to various destinations.
  4. The best services will require fewer confirmations.
  5. Although you are pursuing anonymity, the mixer should still provide you with a Letter of Guarantee. This letter will protect your coins from swindling.

Is Monero Better Than Bitcoin in Terms of Privacy?

Now let’s go back to the very core of this article on how a Bitcoin Mixer fares versus Monero:

Monero, on its own, is already a coin and a privacy tool. Meanwhile, Bitcoin may be popular and backed by several developers. Still, it is easily traceable and must use a mixer to hide its address.

A Bitcoin mixer, however, can help the popular coin by hiding its transaction history. This way, nobody can trace the coins back to their source.

Because not only are the coins mixed with other coins, but the locations are also blended. The best thing about these mixers is that they are effortless to use and will not require extra hardware or software.

Then, there’s Monero. The decentralized, open-source cryptocurrency was explicitly designed to keep transactions private. It utilizes robust encryption techniques.

Techniques used include stealth addresses and ring signatures. Third parties will not be able to pry through your transactions. It is a user-friendly and superior anonymity tool.

However, Monero will require you to use additional hardware and software.

Conclusion

Bitcoin is a popular cryptocurrency. It has preceded the Monero by five years. Although transactions can sometimes be slower, its popularity assures that it is backed by several developers aiming to keep on improving it.

However, being popular has its downfall. Authorities are always eyeing the coin. So, it is designed to follow the usual protocols, with sources easily traceable.

So, you will still need Bitcoin mixers to hide your transactions. These tumblers are simpler to use but may be less secure.

On the other hand, Monero is a coin and a privacy tool in itself. It protects your identity from third parties but may require some extra knowledge when setting it up.

Neither of these tools is illegal. However, the ultimate choice will depend on what you are more comfortable with and your actual transactions.

For example, suppose you must use your cryptocurrency coins for several purposes on the Internet, such as shopping. In that case, you may be better off with Bitcoin and its related tumblers.

Why? Well, it seems you would want an acceptable coin in many places.

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