Recent events in the cryptocurrency market have highlighted some of the dangers of transacting on public blockchains. Transactions can easily be traced and accounts frozen, especially on centralized exchanges.

Blockchain auditing companies can easily track the transaction history of every Bitcoin and this is why any account linked to the dark web is flagged and shut down on Coinbase. Monero on the other hand is fully fungible, meaning one coin cannot be distinguished from any other of its kind. This fungibility is one of the reasons why Monero is rapidly gaining popularity because it offers transaction privacy.

Although the privacy asset appeals to criminals, it is also useful to regular users looking for more freedom and control over their money. Most of the major exchanges such as Coinbase and Binance are centralized and regulated. They can be coerced to collaborate with the authorities to exercise more control over people and their money even in the digital currency realm. This means that your account can easily be frozen if they find a reason to do so and you cannot do much about it. These factors have been making a stronger case for Monero and other privacy-centric coins.

Monero’s speed and low transaction fees boost its appeal

Privacy blokchains tend to be heavy and slow because their transactions are generally larger than regular transactions. The Monero blockchain received a critical upgrade in October 2018 that made it more cost-effective. Its developers achieved this by upgrading the protocol through Bulletproofs that replaced the previous Zero-Knowledge Range proofs which were more difficult to compute and were slow.

The changes to Monero’s protocol in 2018 had profound effects in terms of reducing transaction size, thus making the network faster. For example, it takes roughly 2 minutes for a block to be mined on Monero’s blockchain while it takes as much as 10 minutes for the same process on the Bitcoin blockchain. The Monero blockchain takes roughly 20 minutes to handle 10 transaction confirmations. In comparison, 6 transaction confirmations take 1 hour on the Bitcoin blockchain.

 Monero’s average transaction cost is $0.04 while Bitcoin’s average transaction cost is $14.8 and $16 for the Ethereum network. This means that it is far cheaper to transact using Monero than using ETH or BTC, thus making it more practical. The number of merchants that have been adopting Monero has also been increasing. Travala is one of the platforms that currently accept it as a medium of exchange and of course its properties make it appealing for darknet transactions.

Is Monero a good growth opportunity?

The fact that Monero is currently receiving a lot of attention is a good thing because it means more transactions and thus more value. Its market cap will rise as more money is pumped into it, potentially boosting its price. XMR is currently trading at $277.76 which is almost half its all-time high of 519.13 that it achieved in May 2021. However, it is substantially higher than the sub-$140 prices at the beginning of the year.

Monero’s current price has been experiencing resistance based on Fibonacci retracement levels. However, the long-term outlook based on adoption and the fact that it is currently trending means it might have a lot of upside.  

Another major reason for Monero’s growth potential is that it is scarce. There are only 17,933,473 XMR coins in circulation, which makes it scarcer than Bitcoin. It also has a lower market cap of almost $4.9 billion which pales in comparison to Bitcoin’s $726 billion market cap. Monero has huge growth potential that is currently limited by low adoption but the growing demand for privacy will likely contribute to more value in the future.