Technically, Monero (XMR) is a fork of Bitcoin, a cryptocurrency that was launched in 2014. It was originally aimed at providing maximum privacy, and today it ranks first on the list of the most confidential cryptocurrencies.
All cryptocurrencies provide anonymity for transaction participants, but in practice privacy is limited. For example, transaction records on the Bitcoin blockchain are publicly viewable, which means it is technically possible to track the activity of any user and find out the name of the owner of a particular address.
How Monero ensures user anonymity
Monero provides privacy through the use of ring signatures and hidden addresses. The process of creating a ring signature combines the sender’s keys with public keys from the blockchain.
For each transaction, one-time addresses are generated, randomly created on behalf of the recipient. Using hidden addresses allows you to hide the actual destination of the transaction and the identity of the recipient.
The Ring Confidential Transactions feature hides not only the identities of the participants, but also the amount of the transfer. Since the beginning of 2017, this feature has become mandatory for all cryptocurrency transactions on the Monero network.
The best wallets for XMR
Digital currency wallets are special software that stores your private key, which confirms your ownership of the asset. There are several different versions of such programs:
Pre-installed on hardware devices. These are miniature physical devices that store private keys. They are considered one of the most reliable and secure ways to store cryptocurrency.
In the form of desktop and mobile software. These programs are installed on your personal computer or mobile device. They provide a convenient way to manage your cryptocurrency assets.
In the form of web services on cryptocurrency exchanges. Centralized exchanges and some exchanges provide online wallets that can be used to store and manage assets directly on the platform. This is convenient if you actively trade and often exchange XMR to BTC.
According to the degree of integration with the Internet, wallets are divided into two main types:
Cold wallets. This type includes hardware wallets and desktop software. They are generally considered more secure because the private key data is not connected to the internet and is not susceptible to online threats.
Hot wallets. These are all web versions of wallets and mobile applications that are connected to the Internet. They provide ease of use and access to assets at any time, but are subject to a greater risk of hacking and hacker attacks.
Strictly speaking, desktop storages occupy an intermediate position between cold and hot wallets.
Ledger Nano S
Ledger Nano C is an outstanding hardware wallet designed to securely store XMR and nearly 1,000 other cryptocurrencies. It’s a small, handy device that stores your private keys and easily connects to your smartphone or computer via USB cable if you need to convert Monero to Dollar or withdraw coins from an exchange.
To ensure maximum security, Ledger Nano S uses multiple layers of security, including a PIN code, two-factor authentication and a phrase to restore access to your wallet in the event of loss or theft.
This hardware wallet is relatively inexpensive and easy to use. You can even carry it with you by attaching it to your keys like a keychain. The only limitation of this model is the small amount of memory. If you need to store significant amounts of XMR, then you may want to consider the next generation model, the Ledger Nano X.
Monero Wallet with Graphical User Interface (GUI)
This wallet was developed by the team behind the Monero blockchain. It is designed to be installed on a computer and is compatible with almost all operating systems. Its graphical interface has an intuitive design and provides two operating modes.
Simple mode is suitable for users who frequently make transactions. It simplifies the process of using the wallet and allows you to carry out transactions faster.
Advanced mode downloads the entire Monero blockchain history and is recommended for users who want maximum control over their wallet and access to the entire transaction history. This mode provides a more comprehensive set of features and settings for advanced users.
To use this wallet, you do not have to download the entire blockchain history. It is very efficient in terms of power, memory and bandwidth consumption. It doesn’t necessarily store your entire transaction history, although you can download it using a recovery phrase if necessary.
MyMonero also provides a web version that allows you to quickly access your funds whenever needed. This makes it a convenient and easily accessible means of managing your assets on the Monero network.