Monero VS Bitcoin: Is The Privacy Feature Enough?

Following our crypto news today, we read about the Monero vs Bitcoin relationship and whether the privacy feature of the XMR coin, is enough to outperform Bitcoin.

Bitcoin is the digital cash of the world and the ability to transact large sums of money across the globe, without having to ask for permission and also without the need to use middlemen is one of the groundbreaking reasons. Bitcoin now only seems to serve as a limited set of use cases so it is not very private and the transactions are generally slower and expensive. It is becoming harder to upgrade and add a few new features to the protocol which makes it resistant to new innovations and technologies.

Then Monero came to the scene. Monero is private by default with untraceable transactions and it has an adaptive block size. It has its own codebase and is not simply another bitcoin clone crypto. The developers are mainly anonymous and it ticks the permissionless digital cash boxes so far. However, the Monero VS bitcoin analysts wonder if that is the case.

Bitcoin is pseudonymous which means that the users can transact without providing their identities. This means that there’s no need for using real-world identities as banks do since Bitcoin uses addresses to make transactions possible between the wallets. The problem is that the addresses along with the transaction information all get stored on the public ledger. The users can make transactions without ever attaching the personal identity and it is now widely known that the Bitcoin blockchain is being data mined by the analysis companies which are able to de-anonymize Bitcoin transactions.

Unlike bitcoin, Monero has privacy turned on a default setting and it is untraceable so the anonymity is baked into the protocol. As a side effect, Monero is more fungible than Bitcoin which means that you can’t tell apart from one coin from the next. For example, if a particular exchange has been hacked or the funds get stolen, the hacked coins can be tracked subsequently by exchanges or vendors. This can make a lot of the coins unspendable which is not ideal for the digital representation of cash.

Monero uses three different privacy innovations namely the ring signatures, Ring Confidential transactions, and stealth addresses.