Monero: why the liquidity is a problem with this cryptocurrency?
Most famous cryptocurrency: bitcoin's public ledger, stores all token transactions in its history and is visible to everyone, this was the reason the ransomware were tracked down by the authorities. and this the reason why ransomware and other hackers are turning to other cryptocurrencies that gives more anonymity. Few such currencies are like dash, zcash, and monero, which have additional anonymity built into them.
Monero, in particular, is increasingly the cryptocurrency of choice for the world’s top savvy ransomware criminals.
Monero was released in 2014 by a consortium of developers, many of whom chose to remain anonymous. “privacy and anonymity” are the most important aspects of this digital currency is what they published their whitepaper for Bitmonero as.
Monero is a privacy-oriented cryptocurrency. Any given Monero token does not publicly show who owns it, who spends it or who receives it. Even the amount of any given transaction is kept hidden from the public… and by public we also mean the Monero project founders themselves. This information is kept locked inside the blockchain database. Unless you have the key to open any given entry, all you can see is garbled code.
It disguises each record of transactions and ownership, relying most notably on a process called the "ring signature." This signature is a key that the blockchain database generates during a transaction. When a user receives a ring signature, it is essentially a way of saying that the transaction has been verified as legitimate by the database without revealing the user who verified it.
Monero generates ring signatures for one-time use. As a result, even if someone could look up the signature that authorized a transaction, all they would get is worthless data.
In short, the privacy token operates on its own blockchain, which hides virtually all transaction details. The identity of the sender and recipient, as well as the transaction amount itself, are disguised.
Because of these anonymity features, monero allows cyber criminals greater freedom from some of the tracking tools and mechanisms that the bitcoin blockchain offers.
“On the bitcoin blockchain, you can see what wallet address transacted, how many bitcoin, where it came from, where it’s going,With monero, [the blockchain] obfuscates the wallet address, the amount of the transactions, who the counter-party was, which is pretty much exactly what the bad actors want,” explained Fred Thiel, former chairman of Ultimaco, one of the largest cryptography companies in Europe, which has worked with Microsoft, Google and others on post-quantum encryption.
Monero was also a popular choice on AlphaBay, a massive underground marketplace popular up until it was shut down in 2017.
But Monero has limitations:
For one, it’s not as liquid as other cryptocurrencies – many regulated exchanges have chosen not to list it due to regulatory concerns, explained Mati Greenspan, portfolio manager and Quantum Economics founder. “It certainly isn’t enjoying as much from the recent wave of institutional investments,” he said.
In practice, that means that it’s harder for cyber criminals to get paid directly in the currency.
The digital currency could also be more vulnerable to regulation at its on-and-off-ramps, which is the bridge between fiat cash and crypto tokens.
Moreover, major exchanges are not listing Monero because of controvercies and cyber criminal's eyeing on this always.
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