Though the most dominant coins in cryptocurrency are currently those of Bitcoin (BTC) and Ethereum (ETC), one coin that’s quickly moving up the ladder of popularity is that of Monero (XMR). Founded in 2014 and named for the Esperanto word for currency, Monero is known for its open-source nature, fungibility, and high level of privacy compared to other cryptos.
However, for all that Monero is a rising star in the arena of cryptocurrency, it’s inevitable that some of the buzz that surrounds it isn’t 100% positive. Which of the claims have some truth to them, and which of them are simply myths? This article will debunk the five most common misconceptions about Monero. This guide should be helpful to new XMR traders who need a levelheaded introduction to this fast-rising cryptocurrency.
Misconception #1: Monero Is Nothing but a Second-Tier Cryptocurrency
Perhaps the most common misconception about Monero is that it doesn’t have a future compared to its bigger, older, and more popular counterparts. That implies that if someone wanted to invest in cryptos for the first time, they’d be better off buying the more well-known coins.
But Monero’s market capitalization currently stands at more than $5 billion, which is nothing to sneeze at. To date, it also has the third-largest developer community among the world’s most well-known cryptos. Suffice to say, there’s a highly interested market and a strong community backing the demand for XMR—and given its standout qualities of security, anonymity, and fungibility, Monero is set to widen its reach.
Misconception #2: There Aren’t Any Good Wallet Options for Monero
Another misconception surrounding Monero is that the cryptocurrency doesn’t currently present any strong wallet options. As a consequence, new crypto traders may worry about storing their coins and having an overall poor user experience with Monero.
The dearth of wallet options may have been true in Monero’s early days, but this is certainly not the case now. It is no longer difficult for an XMR trader to find a Monero wallet that can grant them full safety, anonymity, and control over their currency. Knowing that, a newbie Monero trader can expect to enjoy the full benefits of this crypto from the minute they start storing their first coins.
Misconception #3: Monero’s Transaction Fees Are High
One other misconception that may have been truer in previous years is that Monero’s transaction fees are high. Early users may have complained about its high cost per byte compared to other cryptos. But like item #2 above, the trueness of this claim has since been dispelled by recent technological developments.
Several factors account for the cost of a Monero transaction, such as the hardware capacity of the device mining it, the cost of electricity, and the number of transactions vying to be accommodated in a single block. But bulletproofing and other frequent initiatives to optimize Monero’s technology have since made the cost of transaction 80% less than it was back in 2018.
Misconception #4: Monero Is a “Tainted” Cryptocurrency
By far, the most contentious assertion about Monero is that it is often used for unscrupulous means. For every fan of Monero, there may be one other person who’s heard that XMR factors into high-profile cases of money laundering and cybercrime. In these cases, people think of Monero’s true fungibility and untraceable quality to be a double-edged sword; bad agents may enjoy its confidential and highly anonymized system as much as honest traders will.
But in truth, the same could be said of the inherent nature of any other crypto: the malicious intention comes from the user and not the instrument itself. Some important features about Monero—for example the view keys that allow the general public to audit the XMR an NGO receives from donations—are also often lost amidst the scaremongering about it. And in the wake of cases where the crypto is used for incidents like cryptojacking, Monero offers the services of its threat response team.
Misconception #5: Monero Is a “Magic Bullet” for New Crypto Investors
The last misconception is something that may hold true for neophyte crypto investors in general, but it applies in a certain way to Monero. Some traders may look at the distinguishing qualities of Monero and declare it to be a magic bullet of sorts—and then proceed to invest more than they can afford to in this cryptocurrency.
While it’s true that XMR has the potential to be an extremely rewarding long-term investment—especially because it is so exchangeable and secure—it isn’t exempted from the risks that come with venturing into any other crypto. Traders can only see so far into the future, and there’s no telling exactly how the Monero market will look this same time next year. That means that anyone who wants to explore trading in XMR must be as careful, levelheaded, and analytical about their investment, and they should resist the temptation to indulge in fantastical get-rich-quick scenarios.
The Truth About Monero
If you read this article with the intention of learning the truth about Monero, hopefully it has helped guide you through your next big trading decision. Stay up to date when it comes to news about Monero and the crypto sector—and make sure to do further research so that you can sort the facts from the fiction.