Chapter 2: Cryptocurrencies

Monero: Where Cryptocurrency Meets Cryptography

Interesting Fact:

Did you know that ring signatures, stealth addresses, and confidential transactions are the three mechanisms that make Monero private?

easy

11 minutes

In this section, we’re going to take a look at one of the stealthiest cryptos out there, and answer the questions of “What is Monero coin?” and “How does Monero work?”.

Monero is where “Cryptocurrency” meets “Cryptography.” It’s a privacy-focused crypto coin that prioritizes different objectives than your usual crypto assets. By providing a laser-sharp focus on the importance of anonymity, Monero gained momentum and a following of those who have no doubts about the importance of such aspects when it comes to blockchains and cryptocurrencies.

But, by doing so, Monero found itself in the middle of a crossfire. On the one hand, highlighting the importance of anonymity sounds like a non-compromising dedication to protecting user privacy and their data. On the other hand, it’s exactly what criminals want.

In this section, we’re going to look into the questions of “What is Monero coin?”, “What is XMR coin?”, and “What does XMR DeFi look like?”. Understanding this will allow you to see what is Monero used for, and why it’s popular among people with malicious intentions as well.

Well, let’s wait no more and get straight to the point.

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Video Explainer: Monero: Where Cryptocurrency Meets Cryptography

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What is Monero (XMR?)

When it comes to cryptocurrencies, Monero is the one that’s all dressed in camouflage. It’s the coin where anonymity and privacy reign supreme. Similar to Bitcoin in its decentralized nature, Monero takes anonymity to a whole new level, establishing itself as the go-to choice for those valuing discretion. But to truly answer the question of “What is Monero coin?”, we have to take a look at this project’s history.

The origins of Monero trace back to a moment in 2012 with the release of the CryptoNote whitepaper. Authored by the enigmatic developer known only as Nicolas van Saberhagen, this cryptocurrency research paper unveiled revolutionary cryptographic techniques and introduced a novel electronic cash concept called "CryptoNote."

What is Monero coin: anonymity and privacy.

Taking a bold leap from theory to reality, Bytecoin became the first cryptocurrency to implement the CryptoNote protocol. But the story didn't end there. In 2014, Bytecoin's codebase experienced a fork, birthing a brand-new currency known as Bitmonero. Over time, Bitmonero transformed into the Monero that we know today.

By the way, a fork in crypto refers to the process where a blockchain splits into two separate chains, creating a new version of the original cryptocurrency. That’s how Monero was born!

What’s interesting about Monero, is the fact that everything that’s Monero-related is at least somehow shrouded in the mist of anonymity. Unlike most conventional cryptocurrencies, Monero has no single founder or CEO at the top of the project. Instead, a core team of developers is responsible for the creation of it. And, no surprises, most of them chose to remain incognito.

Among the few known names is Riccardo Spagni, known as FluffyPony. For years, he led Monero's development before stepping down in December 2019.

As an open-source endeavor, Monero relies on the support of its community. Thousands of dedicated individuals worldwide have contributed to the project's growth through Monero's Community Crowdfunding System (CCS), ensuring this privacy-oriented cryptocurrency does not fade away because of a sudden lack of resources.

What is Monero coin: Monero's Community Crowdfunding System (CCS).

But understanding the answer to the question of “What is Monero coin?” requires taking a look at why this coin gained popularity as time passed. And, of course, it all comes down to privacy and how Monero approaches it.

With traditional cryptocurrencies, like Bitcoin, users have public addresses where transactions can be traced back and linked. The recipient's address is exposed to the sender, revealing the number of coins they hold, and all transfers are recorded and made public on the blockchain.

But here's where Monero saw an opportunity and grabbed it. They realized that this is not ideal. When you transact with Monero, you don't get an all-access pass to the recipient's holdings, even if you have their public address. Monero's transactions are cleverly designed to be unlinkable and untraceable. Each coin sent to a recipient takes a detour through a randomly generated address, tailored exclusively for that transaction.

Unlike traditional blockchains, Monero's ledger doesn't reveal the true sender and recipient's stealth addresses. The one-time address created for each transaction remains disconnected from the parties' actual addresses, leaving no footsteps for curious online sleuths and detectives to follow. The result? Complete confidentiality for all past and present transactions within the Monero network.

Now, let’s take a deeper look at how does Monero work, because, as you can see, it’s what makes it so different.

How Does Monero Do It?

Monero uses three innovative technological solutions. They’re called ring signatures, stealth addresses, and confidential transactions. Here's a brief rundown of each element.

Ring signatures are used to hide the sender's identity. When a transaction occurs, multiple possible senders are mixed together in a "ring," making it impossible to determine which one is the actual sender. It's like a cloak of invisibility for your transaction! But hey, let’s use a more real-life example.

Imagine you and your close friends decide to send a surprise gift to someone, but you want to keep it a secret who exactly contributed to the gift. So, each of you write your name on a piece of paper and put it into a hat. Then, one of your friends takes out all the pieces of paper, shuffles them, and randomly picks one piece without looking at it.

The name on the chosen paper becomes the "signature" on the gift. Even though everyone contributed, no one knows who specifically gave what, maintaining the surprise and secrecy. Ring signatures work similarly by mixing multiple senders' signatures, making it impossible to tell who exactly sent the transaction.

What is Monero coin: ring signatures, stealth addresses, and confidential transactions.

With stealth addresses, the recipient's public address is obscured. Each transaction generates a one-time address for the recipient, keeping their identity hidden from possible external, unrelated onlookers.

Think of stealth addresses as a temporary forwarding address for your mail. Let's say you're a YouTuber, and you want to open your P.O. Box for the viewers, so they could send you gifts and stuff. Thus, you provide them with a special address that’s designated to receive parcels from strangers, but it’s not your home address.

By doing so, you remain accessible, yet you manage to keep your actual location hidden, because you don’t want to put sensitive personal data out there for anyone. Stealth addresses work similarly by generating unique, one-time addresses for each transaction, protecting the recipient's real address.

And when it comes to Confidential Transactions, Monero uses them to hide the transaction amount. It employs cryptographic methods to ensure that only the sender and recipient know how much was sent, while outsiders are left in the dark.

What is Monero coin: confidential transactions.

Picture a store where the price tags are covered with scratch-off material. When you buy something, the cashier removes the scratch-off to reveal the price, and you pay the amount. However, other customers in the store can't see the original price, only the final amount you paid.

This way, you can make purchases without revealing the exact price to others. Confidential transactions work similarly by hiding the exact transaction amounts, so only the sender and receiver know the actual values, while outside observers see encrypted or distorted information.

By combining these privacy features, Monero managed to take anonymity to a whole new level. No wonder it's become a top choice for privacy-conscious individuals in the crypto world! And, whether we like it or not, that’s the reason why headlines like “The Criminal Underworld Is Dropping Bitcoin for Another Currency” started popping up a few years ago.

What is XMR?

At this point, we've answered the questions of “What is Monero?” and “How does Monero work?”, but we haven’t yet touched upon the question of “What is XMR coin?”. So, let’s do that right now, since XMR is inseparable from Monero.

In its very essence, XMR is the ticker symbol for Monero. Think of XMR as the code name for Monero, just like BTC is for Bitcoin. So, whenever you hear people talking about XMR, they're referring to Monero.

Let’s address the tokenomics of XMR, the Monero token, so you have a better understanding of how this project looks when it comes to practical matters.

Monero's tokenomics are carefully designed to achieve several key objectives: maintaining scarcity and value appreciation through a capped supply, incentivizing miners through a dynamic emission rate and a tail emission mechanism, and ensuring decentralized mining through ASIC resistance.

As you can see, miners play a role within Monero’s ecosystem, because it runs on a variant of the Proof-of-Work algorithm.

To learn more about PoW, be sure to check out this section.

So, the combination of these said features aims to strike a balance between rewarding early participants and securing the network's long-term sustainability. Monero's approach to tokenomics contributes to its appeal as a privacy-focused cryptocurrency.

The question of Monero's tokenomics begins with the total supply of XMR coins. Similar to Bitcoin, Monero has a capped supply to ensure scarcity and value retention. The total supply of XMR is capped at approximately 18.4 million coins. This means that once this number is reached, no new XMR coins will be created. The controlled supply makes Monero a deflationary asset, which may contribute to its potential long-term value appreciation.

Monero's emission rate was designed to ensure a fair distribution of coins over time. In the early days of Monero, the emission rate was higher, gradually decreasing as the network matured. This approach helped incentivize early adopters, including miners, while also ensuring that XMR doesn't flood the market all at once, which could adversely affect its value.

The emission rate decreased smoothly until it eventually ended in 2022, when the last coin was created.

As mentioned previously, Monero runs on a Proof-of-Work consensus mechanism. This means that it relies on miners. Miners use computational power to validate transactions and create new blocks on the blockchain.

Unlike some other cryptocurrencies, Monero's PoW algorithm is designed to be ASIC-resistant, meaning it aims to prevent specialized mining hardware from dominating the network. This allows for a more decentralized mining process and wider participation among individual miners.

What is Monero coin: tail emission.

And, as it’s usually the case with PoW blockchains, as miners validate transactions and add blocks to the blockchain, they are rewarded with newly minted XMR coins. The block reward serves as an incentive for miners to participate in securing the network and maintaining its integrity. However, it's important to note that the block reward decreases over time due to the dynamic emission rate mentioned earlier.

In addition to the block reward, miners also earn transaction fees for including transactions in the blocks they mine. Transaction fees act as an additional incentive for miners and help support the network's security and operations. The fees vary depending on the size and urgency of the transaction and serve as a means to prioritize transactions in the blockchain.

There’s one more thing about Monero. As I said previously, Monero has a fixed supply, and it has already reached the point when the last coin is already mined. But there’s a twist.

Unlike some cryptocurrencies that have a fixed supply, Monero has a "tail emission" mechanism. This means that even after the maximum supply of XMR is reached, a small block reward continues to be given to miners in perpetuity.

This ensures that there is always an incentive for miners to secure the network, even when the block reward from newly minted coins becomes negligible. The tail emission also helps maintain a constant level of inflation to encourage circulation and spending of XMR.

Wrapping Up

So, by now, it’s safe to say that we have touched upon Monero DeFi and got Monero explained. We’ve answered the questions of “What is Monero coin?” and “How does Monero work?”. As you can see, when you understand what the Monero meaning is, the questions about XMR become superfluous.

XRP, and what’s the difference between the two!<\/p>\nRipple is a name that has been causing ripples in the industry for a long time<\/strong>. It’s a company that’s behind not only one of the most popular cryptocurrencies on the market, but also one that’s facing the regulatory authorities in the most intense manner, to date. You could even say that the future of crypto, in some ways, relies heavily on Ripple.<\/p>\nTo understand what’s at stake, it’s important to take a deep dive into what does Ripple offer<\/strong> to the crypto community, how does their project stand out<\/strong>, and, most importantly, how and why do people at Ripple refuse to agree with the US regulatory authorities<\/strong> about how cryptocurrencies are viewed.<\/p>\no, in this section, we’re going to answer such questions as “What is Ripple XRP?<\/em>”, “What is XRP used for?<\/em>”, and what conclusions can you draw if you take a look at it from the “XRP vs Bitcoin<\/em>” perspective. It’s a household name, and you cannot understand the contemporary crypto landscape without understanding the situation surrounding Ripple and XRP.<\/p>\nLet’s see what it is all about!<\/em><\/p>\n<h2>What is Ripple?<\/h2>\nTo put it very simply, the answer to “What is Ripple crypto?<\/em>” would sound something like this: a <a href=https://www.bitdegree.org/"//crypto//learn//what-is-blockchain/">blockchain-based technology and cryptocurrency company with a focus on revolutionizing cross-border payments<\/strong>. These “cross-border payments” are exactly what they sound like - money transfers that take place between the parties from different countries, and that are settled with the help of blockchain technology.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): cross-border payments.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-01.jpg/" alt=\"What is Ripple (XRP): cross-border payments.\" width=\"1000\" height=\"567\"><\/p>\nSo, Ripple offers solutions to financial institutions to enable faster, more cost-effective and transparent international transactions<\/strong>. Now, to get a full picture, it’s important to address the question, “What is XRP crypto?<\/em>” XRP is Ripple's native cryptocurrency, and it serves as a bridge currency to facilitate these transactions.<\/p>\nBut that’s only the surface-level answer to these questions. In order to fully get the picture of what is XRP crypto, and what role it plays in the whole crypto ecosystem, we have to zoom out and take a look at the entire Ripple timeline<\/strong>, what challenges has this company faced, and what milestones has it achieved.<\/p>\n<h2>Ripple, a Timeline<\/h2>\nSo, Ripple’s story began in 2004<\/strong> when Ryan Fugger created RipplePay<\/strong>, an early iteration that laid the groundwork for what would later become the Ripple we know today. Fugger's concept aimed to establish a decentralized digital currency system, sparking the initial inspiration for the project.<\/p>\nFast forward to 2011, and RipplePay caught the attention of Jed McCaleb<\/strong>, a programmer and entrepreneur with a vision to create a digital currency solution that seamlessly integrates with traditional finance. In 2012, McCaleb joined forces with Chris Larsen<\/strong>, a fintech veteran, to co-found OpenCoin.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): Ryan Fugger and Jed McCaleb.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-02-v1.jpg/" alt=\"What is Ripple (XRP): Ryan Fugger and Jed McCaleb.\" width=\"1000\" height=\"549\"><\/p>\nChris Larsen and Jed McCaleb recognized that the global financial system was ripe for disruption, and that blockchain technology held the potential to revolutionize the way value was transferred and financial transactions were conducted.<\/p>\nFueled by this conviction, they embarked on a journey to create a solution that would bridge the gap between the existing financial infrastructure and the emerging possibilities of blockchain tech<\/strong>.<\/p>\nTheir mission was to develop a digital payment protocol that could redefine the way money moves globally<\/strong>. OpenCoin's evolution led to the introduction of the Ripple protocol, which aimed to streamline cross-border transactions using blockchain technology. With the protocol came the birth of <a href=https://www.bitdegree.org/"//crypto//buy-ripple-xrp/">XRP, Ripple's native cryptocurrency, designed to facilitate fast and cost-effective international money transfers.<\/p>\nWe’re going to get into specifics of XRP and the way Ripple functions in a minute. But before doing so, let’s finish the overview of Ripple's journey.<\/p>\nSo, the years that followed saw the company expressing a strategic focus on forming partnerships with traditional financial institutions. In 2014, Ripple began collaborating with industry giants like American Express or Standard Chartered<\/strong>, aiming to leverage its technology for more efficient global transactions. As these partnerships took shape, Ripple's role in the financial landscape began to solidify.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): Ripple journey in 2014.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-03.jpg/" alt=\"What is Ripple (XRP): Ripple journey in 2014.\" width=\"1000\" height=\"601\"><\/p>\nHowever, Ripple's journey was not without its hurdles. Regulatory uncertainties<\/strong> surrounding the classification of cryptocurrencies posed quite a challenge. In 2018, debates emerged about whether XRP could be classified as a <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-security/">security or <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-utility-token/">utility token<\/strong><\/a>.<\/p>\nThe debate intensified as the cryptocurrency market experienced rapid growth and volatility. Amid these challenges, Ripple introduced the Interledger Protocol (ILP)<\/strong>, a groundbreaking initiative to facilitate seamless transactions across various payment networks.<\/p>\nThe legal landscape became even more complex in 2020 when the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-securities-and-exchange-commission-sec/">U.S. Securities and Exchange Commission (SEC)<\/a> filed a lawsuit against Ripple<\/strong>. The lawsuit alleged that the sale of XRP constituted an unregistered securities offering. Ripple responded by firmly asserting its position that XRP is not a security and defending its actions.<\/p>\nThis legal battle raised pivotal questions about the regulatory classification of cryptocurrencies and their implications for the industry.<\/p>\nWe’re going to get into the specifics of the infamous SEC vs Ripple case at the end of this section, because this isn’t just a simple legal question. It’s a battle that may redefine the future of crypto<\/strong>.<\/p>\n<h2>How Does Ripple Work?<\/h2>\nNow, as I’ve already mentioned, one of the key challenges that Ripple sought to overcome was the sluggishness of cross-border transactions<\/strong>. Traditional methods of sending money across borders were characterized by lengthy processing times, intermediaries, and high costs. This created a significant barrier to businesses and individuals alike, making things run slower than they could.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): lengthy processing times, intermediaries, and high costs.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-04.jpg/" alt=\"What is Ripple (XRP): lengthy processing times, intermediaries, and high costs.\" width=\"1000\" height=\"595\"><\/p>\nRipple's solution to this challenge came in the form of its innovative payment protocol and digital currency, XRP<\/strong>. Ripple introduced a network that enabled real-time, cross-border transactions with reduced costs and enhanced efficiency. XRP played a pivotal role in facilitating these transactions by serving as a bridge currency that could be easily converted to various fiat currencies.<\/p>\nBut to continue answering the question of “What is Ripple cryptocurrency?”<\/em>, let's delve into how Ripple works<\/strong> and unveil the mechanics behind their products.<\/p>\nAt the core of Ripple's operation lies the Ripple Protocol<\/strong>, which serves as the technological foundation. This protocol employs a unique consensus mechanism that sets it apart from other blockchain networks. Instead of energy-intensive <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-mining/">mining, Ripple employs a consensus algorithm known as the Ripple Protocol Consensus Algorithm (RPCA)<\/strong>.<\/p>\nThis mechanism enables the network to reach consensus without relying on <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-proof-of-stake-vs-proof-of-work/">Proof-of-Work (PoW) or Proof-of-Stake (PoS)<\/strong><\/a> methods, making it faster and more energy-efficient.<\/p>\nThe second ingredient that’s partially accountable for Ripple’s success is Ripple's distributed ledger, also known as the XRP Ledger<\/strong>. This ledger doesn't just store transactions - it records a wide range of data, including offers to buy or sell assets and even <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">smart contracts<\/strong><\/a>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): Ripple's Distributed Ledger.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-05.jpg/" alt=\"What is Ripple (XRP): Ripple's Distributed Ledger.\" width=\"1000\" height=\"570\"><\/p>\nBut here's the twist: transactions on the XRP Ledger aren't grouped into blocks like traditional blockchains<\/strong>. Instead, they're individually validated as they occur, resulting in near-instant transaction confirmation.<\/p>\nThat being said, we also have to talk about RippleNet<\/strong>. Imagine a digital highway connecting financial institutions across the globe. That's RippleNet. It's a network of banks, payment providers, and other financial institutions<\/strong> that facilitates seamless cross-border transactions.<\/p>\nRippleNet's suite of tools, including xCurrent and On-Demand Liquidity (ODL)<\/strong>, empowers participants to send money across borders with speed and transparency that traditional systems could only dream of.<\/p>\nAll of these features fit under the category of Liquidity Solutions<\/strong> because that’s essentially what Ripple aimed to improve. To rephrase it in a simple way, think of liquidity as the speed at which you can turn stuff into cash<\/strong>. It's like having a vending machine for your assets – the easier and faster you can get your hands on the cold, hard cash, the more liquid your assets are. So, apply this definition to cross-border payments, and you have liquidity solutions that work.<\/p>\nPicture this<\/strong>: financial institutions need liquidity in foreign markets to process transactions. Traditionally, this required pre-funded accounts in each country, tying up capital. But the already-mentioned On-Demand Liquidity flips the script.<\/p>\nIt leverages XRP to provide instant liquidity on demand<\/strong>. Financial institutions can convert one currency into XRP, send it across borders in a flash, and then convert it back into the local currency on the other end. Voilà, instant and affordable liquidity without the hassle that was taken for granted before introducing these novelties.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): multi-signature transactions and conditional payments.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-06.jpg/" alt=\"What is Ripple (XRP): multi-signature transactions and conditional payments.\" width=\"1000\" height=\"584\"><\/p>\nAt this point, the question of “What is XRP cryptocurrency?<\/em>” must be addressed. XRP is the digital glue that holds Ripple's vision together<\/strong>. It serves as a bridge asset, offering a means of transferring value between different currencies. Whether it's converting from dollars to euros or yen to pesos, XRP acts as the intermediary, enabling cost-effective and efficient cross-border transactions.<\/p>\nBut Ripple's XRP Ledger isn't just a one-trick tool. It supports smart contracts and escrows too<\/strong>. Smart contracts enable automated, self-executing agreements without intermediaries, revolutionizing business processes. Escrows, on the other hand, provide a secure way to hold funds until predefined conditions are met. Whether it's complex multi-signature transactions or conditional payments, the XRP Ledger has it covered.<\/p>\nNow, all of this pretty much sums up what made Ripple kind of a big deal, and answers the question of “What is XRP used for?<\/em>” Yet, we’re in crypto, which means that we have to take a better look at XRP, since, when it comes to trading, the XRP cryptocurrency is where it’s all at.<\/p>\n<h2>XRP Tokenomics<\/h2>\nCreated back in 2012, when Ripple was known as OpenCoin<\/strong>, <a href=https://www.bitdegree.org/"//crypto//buy-ripple-xrp/">XRP's purpose wasn't just to play the role of another cryptocurrency. It's not mined like <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin; instead, all the 100 billion XRP coins were created at once<\/strong>, which means that the concept of mining farms is foreign when it comes to Ripple.<\/p>\nBy the way, to understand what these mining farms are all about, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-crypto-mining/">check out this section<\/strong><\/a>.<\/em><\/p>\nOkay, back to answering the question of “What is Ripple XRP?<\/em>”<\/p>\nXRP had an initial supply of <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//xrp-xrp-price/">100 billion tokens<\/a><\/strong>. But as of now, the circulating supply is around 46 billion. Why the shrink?<\/em> Ripple decided to lock up a chunk of those XRP tokens in escrow accounts to ensure a controlled release into the market<\/strong> to keep inflation levels low. Every month, a portion of these escrowed tokens gets released, and any unused ones are sent back to the backroom for safekeeping.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP):\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-07.jpg/" alt=\"What is Ripple (XRP):\" width=\"1000\" height=\"513\"><\/p>\nWhen it comes to XRP’s importance in the Ripple ecosystem, it plays multiple roles: as a bridge currency for cross-border payments, a tool to help secure transactions, and a way to help fight spam<\/strong>.<\/p>\nNow, there's this term called \"burning<\/em>\". When transactions happen on the Ripple network, a small amount of XRP gets destroyed. This reduces the total supply of XRP over time, giving it a hint of deflationary nature<\/strong> to the cryptocurrency.<\/p>\nIt’s thanks to Ripple’s active involvement in looking for serious, long-term partnerships, that XRP didn’t tank and continued to stay relevant as one of the top cryptos in the market. But like any successful story, XRP has its share of drama<\/strong>. The question of whether XRP is a security or not has sparked legal, seemingly never-ending disputes with regulators. <\/p>\n<h2>Ripple vs SEC<\/h2>\nWhen trying to answer the question of “What is Ripple XRP?<\/em>”, you often end up with the finding that Ripple is at the avant-garde of the crypto industry’s battle with the regulatory authorities about the official, legal status of many cryptocurrencies<\/strong>. Here’s the gist of this landmark case.<\/p>\nThe SEC filed a lawsuit in 2020<\/strong>, alleging Ripple's unregistered XRP sales during an initial public offering (IPO) back in 2013 when the company founders were raising funds. The lawsuit accused Ripple’s co-founders of unregistered XRP transactions worth $600 million<\/strong>. The SEC claims that XRP's sale funded Ripple's operations and enriched its management.<\/p>\nThe lawsuit challenges whether XRP should be considered a security. Unlike Bitcoin, the SEC believes XRP fits this classification due to its funding of Ripple's platform. The Howey test, a legal precedent, evaluates if an investment contract is a security. The SEC claims XRP satisfies this test's requirements, as investors lack control over XRP's profit.<\/p>\nIn the legal battle, Ripple opted to fight rather than settle<\/strong>, arguing the SEC's bias. Ripple questioned the SEC's classification of XRP while exempting <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum./n
In a landmark ruling, Judge Analisa Torres partially favored Ripple<\/strong>, stating that only the XRP sales to hedge funds and institutional buyers were unregistered securities offerings. However, the case continues, with Ripple possibly appealing the decision or seeking a settlement.<\/p>\nThe outcome holds implications for crypto regulations and may shape future regulatory proceedings against crypto firms. Therefore, if things go in Ripple’s favor… the future of crypto is surely going to be interesting<\/strong>. So, it’s safe to say that Ripple’s success is not only something that XRP holders are interested in.<\/p>\n<h2>Wrapping Up<\/h2>\nNo, we have reached the point where it’s time to wrap it up. We have answered such questions as “What is Ripple XRP?<\/em>”, “What is XRP cryptocurrency?<\/em>”, “What is XRP used for?<\/em>”, and ran through the overall story of Ripple, their product and their legal battles with regulatory authorities.<\/p>\nIf you want to find out more about other popular crypto projects, make sure to check out other sections in this Crypto 101 Handbook<\/strong>.<\/p>","definition":"Did you know that transactions on the XRP Ledger aren't grouped into blocks like on traditional blockchains?","status":"published","meta_title":"What is Ripple (XRP)? History, Purpose, and More","meta_description":"If you want to figure out what is Ripple (XRP), what is XRP used for, or how XRP VS Bitcoin comparison would unfold, check out this article!","meta_keywords":"what is ripple xrp, what is xrp crypto, what is ripple crypto, what is ripple cryptocurrency, what is xrp cryptocurrency, what is xrp used for, xrp vs bitcoin,","modified_content":"In this section, we’re going to talk about what is Ripple & <a href=https://www.bitdegree.org/"//crypto//buy-ripple-xrp/">XRP, and what’s the difference between the two!<\/p>\nRipple is a name that has been causing ripples in the industry for a long time<\/strong>. It’s a company that’s behind not only one of the most popular cryptocurrencies on the market, but also one that’s facing the regulatory authorities in the most intense manner, to date. You could even say that the future of crypto, in some ways, relies heavily on Ripple.<\/p>\nTo understand what’s at stake, it’s important to take a deep dive into what does Ripple offer<\/strong> to the crypto community, how does their project stand out<\/strong>, and, most importantly, how and why do people at Ripple refuse to agree with the US regulatory authorities<\/strong> about how cryptocurrencies are viewed.<\/p>\no, in this section, we’re going to answer such questions as “What is Ripple XRP?<\/em>”, “What is XRP used for?<\/em>”, and what conclusions can you draw if you take a look at it from the “XRP vs Bitcoin<\/em>” perspective. It’s a household name, and you cannot understand the contemporary crypto landscape without understanding the situation surrounding Ripple and XRP.<\/p>\nLet’s see what it is all about!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is Ripple? Beginner-Friendly XRP Explainer (Animated)\"\n title=\"What is Ripple? Beginner-Friendly XRP Explainer (Animated)\" class=\"border-0\">\n Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Is Ripple \"it\" When it Comes to Cross-Border Transactions?<\/h4>\n Reading is not your thing? Watch the \"Is Ripple \"it\" When it Comes to Cross-Border Transactions?\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"G3QrL3Gp2s0\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n What is Ripple? Beginner-Friendly XRP Explainer (Animated)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-ripple-beginner-friendly-xrp-explainer-animated.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-ripple-beginner-friendly-xrp-explainer-animated.jpg?tr=w-760 1000w\"\n alt=\"What is Ripple? Beginner-Friendly XRP Explainer (Animated)\"\n title=\"What is Ripple? Beginner-Friendly XRP Explainer (Animated)\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What is Ripple? Beginner-Friendly XRP Explainer (Animated)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n SUBSCRIBE \n ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What is Ripple?<\/h2>\nTo put it very simply, the answer to “What is Ripple crypto?<\/em>” would sound something like this: a <a href=https://www.bitdegree.org/"//crypto//learn//what-is-blockchain/">blockchain-based technology and cryptocurrency company with a focus on revolutionizing cross-border payments<\/strong>. These “cross-border payments” are exactly what they sound like - money transfers that take place between the parties from different countries, and that are settled with the help of blockchain technology.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): cross-border payments.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-01.jpg/" alt=\"What is Ripple (XRP): cross-border payments.\" width=\"1000\" height=\"567\"><\/p>\nSo, Ripple offers solutions to financial institutions to enable faster, more cost-effective and transparent international transactions<\/strong>. Now, to get a full picture, it’s important to address the question, “What is XRP crypto?<\/em>” XRP is Ripple's native cryptocurrency, and it serves as a bridge currency to facilitate these transactions.<\/p>\nBut that’s only the surface-level answer to these questions. In order to fully get the picture of what is XRP crypto, and what role it plays in the whole crypto ecosystem, we have to zoom out and take a look at the entire Ripple timeline<\/strong>, what challenges has this company faced, and what milestones has it achieved.<\/p>\n<h2>Ripple, a Timeline<\/h2>\nSo, Ripple’s story began in 2004<\/strong> when Ryan Fugger created RipplePay<\/strong>, an early iteration that laid the groundwork for what would later become the Ripple we know today. Fugger's concept aimed to establish a decentralized digital currency system, sparking the initial inspiration for the project.<\/p>\nFast forward to 2011, and RipplePay caught the attention of Jed McCaleb<\/strong>, a programmer and entrepreneur with a vision to create a digital currency solution that seamlessly integrates with traditional finance. In 2012, McCaleb joined forces with Chris Larsen<\/strong>, a fintech veteran, to co-found OpenCoin.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): Ryan Fugger and Jed McCaleb.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-02-v1.jpg/" alt=\"What is Ripple (XRP): Ryan Fugger and Jed McCaleb.\" width=\"1000\" height=\"549\"><\/p>\nChris Larsen and Jed McCaleb recognized that the global financial system was ripe for disruption, and that blockchain technology held the potential to revolutionize the way value was transferred and financial transactions were conducted.<\/p>\nFueled by this conviction, they embarked on a journey to create a solution that would bridge the gap between the existing financial infrastructure and the emerging possibilities of blockchain tech<\/strong>.<\/p>\nTheir mission was to develop a digital payment protocol that could redefine the way money moves globally<\/strong>. OpenCoin's evolution led to the introduction of the Ripple protocol, which aimed to streamline cross-border transactions using blockchain technology. With the protocol came the birth of <a href=https://www.bitdegree.org/"//crypto//buy-ripple-xrp/">XRP, Ripple's native cryptocurrency, designed to facilitate fast and cost-effective international money transfers.<\/p>\nWe’re going to get into specifics of XRP and the way Ripple functions in a minute. But before doing so, let’s finish the overview of Ripple's journey.<\/p>\nSo, the years that followed saw the company expressing a strategic focus on forming partnerships with traditional financial institutions. In 2014, Ripple began collaborating with industry giants like American Express or Standard Chartered<\/strong>, aiming to leverage its technology for more efficient global transactions. As these partnerships took shape, Ripple's role in the financial landscape began to solidify.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): Ripple journey in 2014.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-03.jpg/" alt=\"What is Ripple (XRP): Ripple journey in 2014.\" width=\"1000\" height=\"601\"><\/p>\nHowever, Ripple's journey was not without its hurdles. Regulatory uncertainties<\/strong> surrounding the classification of cryptocurrencies posed quite a challenge. In 2018, debates emerged about whether XRP could be classified as a <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-security/">security or <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-utility-token/">utility token<\/strong><\/a>.<\/p>\nThe debate intensified as the cryptocurrency market experienced rapid growth and volatility. Amid these challenges, Ripple introduced the Interledger Protocol (ILP)<\/strong>, a groundbreaking initiative to facilitate seamless transactions across various payment networks.<\/p>\nThe legal landscape became even more complex in 2020 when the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-securities-and-exchange-commission-sec/">U.S. Securities and Exchange Commission (SEC)<\/a> filed a lawsuit against Ripple<\/strong>. The lawsuit alleged that the sale of XRP constituted an unregistered securities offering. Ripple responded by firmly asserting its position that XRP is not a security and defending its actions.<\/p>\nThis legal battle raised pivotal questions about the regulatory classification of cryptocurrencies and their implications for the industry.<\/p>\nWe’re going to get into the specifics of the infamous SEC vs Ripple case at the end of this section, because this isn’t just a simple legal question. It’s a battle that may redefine the future of crypto<\/strong>.<\/p>\n<h2>How Does Ripple Work?<\/h2>\nNow, as I’ve already mentioned, one of the key challenges that Ripple sought to overcome was the sluggishness of cross-border transactions<\/strong>. Traditional methods of sending money across borders were characterized by lengthy processing times, intermediaries, and high costs. This created a significant barrier to businesses and individuals alike, making things run slower than they could.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): lengthy processing times, intermediaries, and high costs.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-04.jpg/" alt=\"What is Ripple (XRP): lengthy processing times, intermediaries, and high costs.\" width=\"1000\" height=\"595\"><\/p>\nRipple's solution to this challenge came in the form of its innovative payment protocol and digital currency, XRP<\/strong>. Ripple introduced a network that enabled real-time, cross-border transactions with reduced costs and enhanced efficiency. XRP played a pivotal role in facilitating these transactions by serving as a bridge currency that could be easily converted to various fiat currencies.<\/p>\nBut to continue answering the question of “What is Ripple cryptocurrency?”<\/em>, let's delve into how Ripple works<\/strong> and unveil the mechanics behind their products.<\/p>\nAt the core of Ripple's operation lies the Ripple Protocol<\/strong>, which serves as the technological foundation. This protocol employs a unique consensus mechanism that sets it apart from other blockchain networks. Instead of energy-intensive <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-mining/">mining, Ripple employs a consensus algorithm known as the Ripple Protocol Consensus Algorithm (RPCA)<\/strong>.<\/p>\nThis mechanism enables the network to reach consensus without relying on <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-proof-of-stake-vs-proof-of-work/">Proof-of-Work (PoW) or Proof-of-Stake (PoS)<\/strong><\/a> methods, making it faster and more energy-efficient.<\/p>\nThe second ingredient that’s partially accountable for Ripple’s success is Ripple's distributed ledger, also known as the XRP Ledger<\/strong>. This ledger doesn't just store transactions - it records a wide range of data, including offers to buy or sell assets and even <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">smart contracts<\/strong><\/a>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): Ripple's Distributed Ledger.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-05.jpg/" alt=\"What is Ripple (XRP): Ripple's Distributed Ledger.\" width=\"1000\" height=\"570\"><\/p>\nBut here's the twist: transactions on the XRP Ledger aren't grouped into blocks like traditional blockchains<\/strong>. Instead, they're individually validated as they occur, resulting in near-instant transaction confirmation.<\/p>\nThat being said, we also have to talk about RippleNet<\/strong>. Imagine a digital highway connecting financial institutions across the globe. That's RippleNet. It's a network of banks, payment providers, and other financial institutions<\/strong> that facilitates seamless cross-border transactions.<\/p>\nRippleNet's suite of tools, including xCurrent and On-Demand Liquidity (ODL)<\/strong>, empowers participants to send money across borders with speed and transparency that traditional systems could only dream of.<\/p>\nAll of these features fit under the category of Liquidity Solutions<\/strong> because that’s essentially what Ripple aimed to improve. To rephrase it in a simple way, think of liquidity as the speed at which you can turn stuff into cash<\/strong>. It's like having a vending machine for your assets – the easier and faster you can get your hands on the cold, hard cash, the more liquid your assets are. So, apply this definition to cross-border payments, and you have liquidity solutions that work.<\/p>\nPicture this<\/strong>: financial institutions need liquidity in foreign markets to process transactions. Traditionally, this required pre-funded accounts in each country, tying up capital. But the already-mentioned On-Demand Liquidity flips the script.<\/p>\nIt leverages XRP to provide instant liquidity on demand<\/strong>. Financial institutions can convert one currency into XRP, send it across borders in a flash, and then convert it back into the local currency on the other end. Voilà, instant and affordable liquidity without the hassle that was taken for granted before introducing these novelties.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP): multi-signature transactions and conditional payments.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-06.jpg/" alt=\"What is Ripple (XRP): multi-signature transactions and conditional payments.\" width=\"1000\" height=\"584\"><\/p>\nAt this point, the question of “What is XRP cryptocurrency?<\/em>” must be addressed. XRP is the digital glue that holds Ripple's vision together<\/strong>. It serves as a bridge asset, offering a means of transferring value between different currencies. Whether it's converting from dollars to euros or yen to pesos, XRP acts as the intermediary, enabling cost-effective and efficient cross-border transactions.<\/p>\nBut Ripple's XRP Ledger isn't just a one-trick tool. It supports smart contracts and escrows too<\/strong>. Smart contracts enable automated, self-executing agreements without intermediaries, revolutionizing business processes. Escrows, on the other hand, provide a secure way to hold funds until predefined conditions are met. Whether it's complex multi-signature transactions or conditional payments, the XRP Ledger has it covered.<\/p>\nNow, all of this pretty much sums up what made Ripple kind of a big deal, and answers the question of “What is XRP used for?<\/em>” Yet, we’re in crypto, which means that we have to take a better look at XRP, since, when it comes to trading, the XRP cryptocurrency is where it’s all at.<\/p>\n<h2>XRP Tokenomics<\/h2>\nCreated back in 2012, when Ripple was known as OpenCoin<\/strong>, <a href=https://www.bitdegree.org/"//crypto//buy-ripple-xrp/">XRP's purpose wasn't just to play the role of another cryptocurrency. It's not mined like <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin; instead, all the 100 billion XRP coins were created at once<\/strong>, which means that the concept of mining farms is foreign when it comes to Ripple.<\/p>\nBy the way, to understand what these mining farms are all about, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-crypto-mining/">check out this section<\/strong><\/a>.<\/em><\/p>\nOkay, back to answering the question of “What is Ripple XRP?<\/em>”<\/p>\nXRP had an initial supply of <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//xrp-xrp-price/">100 billion tokens<\/a><\/strong>. But as of now, the circulating supply is around 46 billion. Why the shrink?<\/em> Ripple decided to lock up a chunk of those XRP tokens in escrow accounts to ensure a controlled release into the market<\/strong> to keep inflation levels low. Every month, a portion of these escrowed tokens gets released, and any unused ones are sent back to the backroom for safekeeping.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Ripple (XRP):\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-ripple-xrp-07.jpg/" alt=\"What is Ripple (XRP):\" width=\"1000\" height=\"513\"><\/p>\nWhen it comes to XRP’s importance in the Ripple ecosystem, it plays multiple roles: as a bridge currency for cross-border payments, a tool to help secure transactions, and a way to help fight spam<\/strong>.<\/p>\nNow, there's this term called \"burning<\/em>\". When transactions happen on the Ripple network, a small amount of XRP gets destroyed. This reduces the total supply of XRP over time, giving it a hint of deflationary nature<\/strong> to the cryptocurrency.<\/p>\nIt’s thanks to Ripple’s active involvement in looking for serious, long-term partnerships, that XRP didn’t tank and continued to stay relevant as one of the top cryptos in the market. But like any successful story, XRP has its share of drama<\/strong>. The question of whether XRP is a security or not has sparked legal, seemingly never-ending disputes with regulators. <\/p>\n<h2>Ripple vs SEC<\/h2>\nWhen trying to answer the question of “What is Ripple XRP?<\/em>”, you often end up with the finding that Ripple is at the avant-garde of the crypto industry’s battle with the regulatory authorities about the official, legal status of many cryptocurrencies<\/strong>. Here’s the gist of this landmark case.<\/p>\nThe SEC filed a lawsuit in 2020<\/strong>, alleging Ripple's unregistered XRP sales during an initial public offering (IPO) back in 2013 when the company founders were raising funds. The lawsuit accused Ripple’s co-founders of unregistered XRP transactions worth $600 million<\/strong>. The SEC claims that XRP's sale funded Ripple's operations and enriched its management.<\/p>\nThe lawsuit challenges whether XRP should be considered a security. Unlike Bitcoin, the SEC believes XRP fits this classification due to its funding of Ripple's platform. The Howey test, a legal precedent, evaluates if an investment contract is a security. The SEC claims XRP satisfies this test's requirements, as investors lack control over XRP's profit.<\/p>\nIn the legal battle, Ripple opted to fight rather than settle<\/strong>, arguing the SEC's bias. Ripple questioned the SEC's classification of XRP while exempting <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum./n
In a landmark ruling, Judge Analisa Torres partially favored Ripple<\/strong>, stating that only the XRP sales to hedge funds and institutional buyers were unregistered securities offerings. However, the case continues, with Ripple possibly appealing the decision or seeking a settlement.<\/p>\nThe outcome holds implications for crypto regulations and may shape future regulatory proceedings against crypto firms. Therefore, if things go in Ripple’s favor… the future of crypto is surely going to be interesting<\/strong>. So, it’s safe to say that Ripple’s success is not only something that XRP holders are interested in.<\/p>\n<h2>Wrapping Up<\/h2>\nNo, we have reached the point where it’s time to wrap it up. We have answered such questions as “What is Ripple XRP?<\/em>”, “What is XRP cryptocurrency?<\/em>”, “What is XRP used for?<\/em>”, and ran through the overall story of Ripple, their product and their legal battles with regulatory authorities.<\/p>\nIf you want to find out more about other popular crypto projects, make sure to check out other sections in this Crypto 101 Handbook<\/strong>.<\/p>","youtube_video":{"id":126,"channel_id":1,"sort":8,"video_title":"What is Ripple? Beginner-Friendly XRP Explainer (Animated)","description":"What is Ripple & XRP? What is XRP used for?\n\nRipple and its native cryptocurrency & token XRP are household names when it comes to crypto. Not only because XRP is among the most popular cryptos, but Ripple itself has become a flagbearer of the entire crypto industry when it comes to facing challenges with regulatory authorities, and, thus, fighting for the industry's future.\n\nIn this video, I'll explain what are Ripple & XRP, what is XRP used for and how does XRP differ from other cryptos, when evaluated from the XRP vs. Bitcoin perspective. I'll illustrate how Ripple became what it is today, and how they ended up in such an intense situation when it comes to facing legal & regulatory challenges.\n\nDo you have any experience with Ripple? Have you been following Ripple's throughout its journey of legal battles? Do you think that the case will conclude in Ripple's favor? Leave your comments and guesses in the comment section below!\n\nVideo Time Table:\n\n0:00 Introduction\n1:07 What is Ripple?\n2:02 Ripple's Timeline\n4:44 How Does Ripple Work?\n8:46 XRP Tokenomics\n10:16 Ripple vs SEC\n12:01 Wrap-up: What is Ripple?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#Ripple #XRP #RippleNews","video_id":"G3QrL3Gp2s0","duration":752,"view_count":584,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-ripple-beginner-friendly-xrp-explainer-animated.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-09-28T14:03:34.000000Z","created_at":"2023-09-28T23:00:13.000000Z","updated_at":"2024-01-09T23:00:03.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}}" :prev-section="{"id":617,"chapter_id":2,"order":18,"featured_image_id":5059,"youtube_video_id":107,"author_id":4,"created_at":"2023-08-09T07:45:04.000000Z","updated_at":"2023-12-28T22:17:07.000000Z","slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","content":"In this section, I’m going to tell you about what is Avalanche Network, or <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-avalanche-avax/">AVAX!/n
Five years ago, an anonymous group of individuals named “Team Rocket<\/strong>” tweeted their masterful idea that would tilt the crypto world on the side. And while you probably know the name from the anime, this “Team Rocket” was not planning to steal anyone’s Pokemon. Nor crypto, for that matter!<\/p>\nThe mystery team came up with a new blockchain protocol that would combine two sets of rules: the Classical consensus and the Nakamoto consensus<\/strong>. Someone caught on to the idea and started experimenting, trying to create a network that was both scalable and robust, as well as speedy and decentralized. They created something bound to become a hallmark in crypto, and called it Avalanche.<\/p>\nIn this section, I’m going to answer questions such as what is AVAX, what makes it so unique, and why should it be considered among the biggest competitors to industry giants such as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-ethereum/">Ethereum./n
Let’s get right into it!<\/em><\/p>\n<h2>What is AVAX?<\/h2>\nFirst things first - what is AVAX? Allow me to explain it in simple terms!<\/p>\nAvalanche Network, or AVAX, is both a blockchain platform and a cryptocurrency<\/strong>, similar to the double-set you know as Ethereum. It’s an open-source, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-proof-of-stake-pos/">Proof-of-Stake crypto network using <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">smart contracts<\/strong><\/a> to support its blockchain projects. Mainly, those projects include creating <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-dapps-in-crypto/">decentralized applications, or dApps<\/strong><\/a>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: blockchain platform + cryptocurrency.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-01.jpg/" alt=\"What is AVAX: blockchain platform + cryptocurrency.\" width=\"1000\" height=\"302\"><\/p>\nNow, admittedly, I’ve just blurted out a lot of industry-specific terminology. If you’re unfamiliar with any of these terms, or would like a refresher, in general, make sure to check out other chapters of this Crypto 101 Handbook<\/strong> - there are sections covering all of those concepts in detail!<\/em><\/p>\nLike most blockchains, Avalanche also has a native token called AVAX. It serves as a utility token<\/strong> and has plenty of uses in the Avalanche ecosystem, including transactions, staking, and governance<\/strong>. But I’ll get to that in a minute; right now, let’s stay with the network itself!<\/p>\nSo, like I said, “open-source” is one of the key terms to describe what is AVAX<\/strong>. Very generally speaking, it refers to data sharing and reciprocal operations.<\/p>\nLet’s say you’re doing a homework assignment requiring a lot of research. However, maybe the topic is super difficult, or maybe there just isn’t enough information online. So, naturally, you call your friend in a panic, asking if they found anything for the assignment, and lo and behold - they didn’t.<\/p>\nNow, you’re wondering if you should quit on the assignment altogether or write a mean letter to the teacher, but in the midst of your frustration, you accidentally find a book with the exact information you need. You’re an awesome friend, so knowing your classmates are also struggling, you go online and upload the info on Wikipedia, then send out the link so that everyone can access it.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: Avalanche Network.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-02.jpg/" alt=\"What is AVAX: Avalanche Network.\" width=\"1000\" height=\"815\"><\/p>\nBasically, you make valuable information available to all. This is what’s called interoperability<\/strong> - what you just did by gathering and sharing that info, so it won’t have to be collected again and is attainable to anyone looking for it.<\/p>\nWikipedia, in this instance, is an open-source network, allowing anyone to distribute info, change it, and add to what’s important. In the same way, Avalanche allows its users to submit proposals for protocol changes.<\/p>\nAvalanche is known for tackling one of the main problems in crypto: scalability<\/strong>.  The term refers to the network's capability of expanding and meeting the growing demand without declining its core functionality and features.<\/p>\nLet’s get back to the impossible homework example. So, you’re on your computer, researching intensely. You’re only finding tidbits of information on different sites, but they all seem somewhat useful, so you don’t close any of them, only adding more and more tabs on your browser, and your elderly computer is getting kind of tired. It starts wheezing and heating up, unable to handle such pressure.<\/p>\nPretty frustrated with your computer now, huh?<\/em><\/p>\nWell, in the crypto world, your computer struggling would be called a scaling problem<\/strong>, which many crypto networks face. Crypto activity is largely growing, and many systems are unable to stay fast, cheap, and secure - transactions are declining, the prices are increasing, and the systems keep weakening.<\/p>\nHowever, the AVAX Network managed to come up with a solution<\/strong> - a unique system model that allows exceptional functionality, high speed, and low prices. It’s also one of the several things that make Avalanche so unique!<\/p>\n<h2>What Makes Avalanche Network Unique?<\/h2>\nSo, moving on, let’s see what’s actually so special about AVAX. It might be a bit difficult to grasp, but I’ll attempt to explain it in the easiest way possible!<\/p>\nFirst off, subnets! AVAX subnets are sets of validators working on three individual AVAX blockchain networks <\/strong>that have their own rules and functions, yet remain part of the primary network. It’s like having three employees at the restaurant - a waiter, a chef, and a host. They all have different jobs, but work towards the same goal in the same place, and are all equally important.<\/p>\nTo begin with, we have the X-Chain<\/strong>, known as the Exchange chain. It’s mainly used to create Avalanche-based tokens<\/strong>, both fungible and non-fungible, or what you might know as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-non-fungible-token-nft/">NFTs./n
The second one is called C-Chain, or the Contract chain<\/strong>. It’s super important that you know what is AVAX C-Chain! This one is responsible for hosting smart contracts and enabling the functionality of dApps<\/strong>. In this case, C-Chain is probably the restaurant's chef, the key to the whole operation.<\/p>\nFinally, we have the P-Chain or the Platform chain<\/strong>, which manages the validators. Similarly to other crypto networks, P-Chain allows you to stake <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-avalanche-avax/">AVAX tokens and easily become a transaction validator<\/strong>. Which brings me to my next point!<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: what makes Avalanche Network Unique?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-03.jpg/" alt=\"What is AVAX: what makes Avalanche Network Unique?\" width=\"1000\" height=\"334\"><\/p>\nAvalanche uses a model called “Subsampled Voting<\/strong>.” Basically, it means that there’s a large number of volunteers who get randomly asked to check some things on the network and reach a unanimous answer.<\/p>\nFor example - the validity of a transaction<\/strong>. A random group of users is asked whether the transaction should be accepted or rejected after the system initially chose to validate it.<\/p>\nWhat happens next is called network gossiping<\/strong>. Quite an amusing name, right?<\/em> Basically, the participants get together to exchange information and opinions until reaching a consensus to accept or deny the transaction.<\/p>\nWhat makes AVAX’s validation system so special is that unlike with <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-proof-of-work-pow/">Proof-of-Work or other <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-proof-of-stake-pos/">Proof-of-Stake mechanisms, the number of nodes, or validators, is irrelevant - the consensus will still be reached<\/strong>.<\/p>\nAnother thing to add to answering what is AVAX is its unusual design<\/strong>. As you’ve probably gathered, AVAX is powered by, well, AVAX, the network’s native token. But what else?<\/p>\nSlush, Snowflake, Snowball, and Avalanche<\/strong>! Did you just imagine a crew of four superhero penguins in a cartoon? Well, the crew is actually called the Snow family<\/strong>, and they are not superhero penguins, but the four mechanisms of the Avalanche protocol. Basically, these four are what you get from combining the Classical consensus and the Nakamoto consensus, as I mentioned in the beginning.<\/p>\nImagine you’re designing the newest iPhone. You want it to be optimized and the best variation there has ever been, of course. So, you take the key functions of the earlier iPhones that still resonate with Apple users, and add the newest features, so that the phone is still familiar, but also up-to-date, too.<\/p>\nThe Snow family combo and unique Avalanche protocol are what made the network secure and easy to scale<\/strong>, eventually leading it to be one of the major crypto sensations.<\/p>\n<h2>Why Does it Rival Ethereum?<\/h2>\nBut does that sensation really pose a threat to the most widespread and usable network of all? The so-called “Global Computer”, Ethereum? Which, by the way, I have a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-ethereum/">whole separate section about<\/strong><\/a>, so I suggest you check it out!<\/em><\/p>\nWe all know that Ethereum has some fancy names associated with it, like the aforementioned “Global Computer<\/strong>” or “Blockchain 2.0<\/strong>”. However, Avalanche, true to its name, has been crashing down on the cryptocurrency world with an even more forceful label - “the future of DeFi”.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: ERC-20.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-04.jpg/" alt=\"What is AVAX: ERC-20.\" width=\"1000\" height=\"1209\"><\/p>\nQuite a majestic name, right? Well, with its unique features, improved protocols, and enormous scalability, the system truly threatens to become “Blockchain 3.0<\/strong>”. And if you’re still doubtful, or still question what is AVAX compared to Ethereum, just allow me to name some basic differences between the two.<\/p>\nFirst of all, Avalanche claims much faster transaction speeds<\/strong> - in one second, AVAX is theoretically able to carry out more than 6,500 transactions, whereas Ethereum can only handle 15. Also, on AVAX, transactions are usually finalized in under three seconds<\/strong>.<\/p>\nNext up, considering DeFi usability, it’s kind of hard to say which is better. For now, sure, Ethereum is much more popular and accepted<\/strong>. The years of trust and high-profile project development did their thing, but with the speed at which Avalanche is growing, ETH is surely facing some serious competition!<\/p>\nThe Avalanche Network is also much harder to attack<\/strong>. I won’t delve into the technicalities, but in short, it would take the attacker controlling 51% of staked assets to breach Ethereum - for AVAX, that number goes up to about 80%.<\/p>\nToken-wise, <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">ETH is winning, of course<\/strong>. It’s hard to replace the second most popular cryptocurrency, after all! However, speaking of tokens, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-avalanche-avax/">AVAX lacks something that ultimately puts Ethereum forward. It’s not compatible with the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-erc-20/">ERC-20 standard<\/strong>. Let me explain.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: wrapped AVAX.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-05.jpg/" alt=\"What is AVAX: wrapped AVAX.\" width=\"1000\" height=\"951\"><\/p>\nLet’s say you acquire some AVAX coins. You may want to use them on a crypto application like <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-aave-crypto/">AAVE, which is basically just a platform that allows you to earn interest by lending your crypto. However, AAVE is based on the Ethereum blockchain, and it won’t allow you to do anything with your AVAX, since it’s not compatible with the token standard of ETH, called ERC-20<\/strong>.<\/p>\nDefeat? No! You’ll just have to wrap up your AVAX<\/strong>. But what is wrapped AVAX, then? Actually, “wrapped tokens” are a bit of a complicated topic, but for now, I’ll explain it shortly.<\/p>\nLet’s say you decide to go diving. Obviously, you won’t plunge into the deep end with your trunks and nothing else - you need a diver’s suit for protection and oxygen. So, the suit serves as a tool to help you navigate an environment that’s completely alien to you. Right?<\/p>\nWell, the same can be said about wrapped tokens, as well. Wrapped tokens are a means to communicate between blockchains<\/strong>, so that you could use equivalent native assets of a specific protocol on other, non-compatible ones.<\/p>\n<h2>Wrapping Up<\/h2>\nNow, I have to admit - answering the question of what is AVAX and presenting the many intricacies it has can be a challenge, but let’s recap what we know so far.<\/p>\nAvalanche takes the general trilemma of scalability, security, and decentralization, and addresses it all with its<\/strong> multi-chain design and a unique consensus mechanism<\/strong> - becoming a breath of fresh air in the crypto space! Also, it has its very own native token, AVAX, which you can actually find on your usual crypto exchanges, like <a href=https://www.bitdegree.org/"//crypto//goon//binance/" target=\"_blank\" rel=\"nofollow noindex noopener\">Binance<\/strong><\/a> or <a href=https://www.bitdegree.org/"//crypto//goon//coinbase/" target=\"_blank\" rel=\"nofollow noindex noopener\">Coinbase<\/strong><\/a>.<\/p>\nIn the end, though, Avalanche has many more attributes that are a bit too complicated to tackle in one short section.<\/p>","definition":"Did you know that the Avalanche Network is powered by four mechanisms \u2013 Slush, Snowflake, Snowball, and Avalanche \u2013 which are called the Snow family?","status":"published","meta_title":"What is AVAX and the Network Behind It?","meta_description":"If you're curious about what is AVAX, what is wrapped AVAX, or what is the Avalanche Network all about, check out this article and find out!","meta_keywords":"what is avax, what is avax c chain, what is wrapped avax","modified_content":"In this section, I’m going to tell you about what is Avalanche Network, or <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-avalanche-avax/">AVAX!/n
Five years ago, an anonymous group of individuals named “Team Rocket<\/strong>” tweeted their masterful idea that would tilt the crypto world on the side. And while you probably know the name from the anime, this “Team Rocket” was not planning to steal anyone’s Pokemon. Nor crypto, for that matter!<\/p>\nThe mystery team came up with a new blockchain protocol that would combine two sets of rules: the Classical consensus and the Nakamoto consensus<\/strong>. Someone caught on to the idea and started experimenting, trying to create a network that was both scalable and robust, as well as speedy and decentralized. They created something bound to become a hallmark in crypto, and called it Avalanche.<\/p>\nIn this section, I’m going to answer questions such as what is AVAX, what makes it so unique, and why should it be considered among the biggest competitors to industry giants such as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-ethereum/">Ethereum./n
Let’s get right into it!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is AVAX? (Avalanche Network Explained With Animations)\"\n title=\"What is AVAX? (Avalanche Network Explained With Animations)\" class=\"border-0\">\n Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?<\/h4>\n Reading is not your thing? Watch the \"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"VxscXKDAGnk\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n What is AVAX? (Avalanche Network Explained With Animations)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-avax-avalanche-network-explained-with-animations.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-avax-avalanche-network-explained-with-animations.jpg?tr=w-760 1000w\"\n alt=\"What is AVAX? (Avalanche Network Explained With Animations)\"\n title=\"What is AVAX? 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(Avalanche Network Explained With Animations)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n SUBSCRIBE \n ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What is AVAX?<\/h2>\nFirst things first - what is AVAX? Allow me to explain it in simple terms!<\/p>\nAvalanche Network, or AVAX, is both a blockchain platform and a cryptocurrency<\/strong>, similar to the double-set you know as Ethereum. It’s an open-source, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-proof-of-stake-pos/">Proof-of-Stake crypto network using <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">smart contracts<\/strong><\/a> to support its blockchain projects. Mainly, those projects include creating <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-dapps-in-crypto/">decentralized applications, or dApps<\/strong><\/a>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: blockchain platform + cryptocurrency.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-01.jpg/" alt=\"What is AVAX: blockchain platform + cryptocurrency.\" width=\"1000\" height=\"302\"><\/p>\nNow, admittedly, I’ve just blurted out a lot of industry-specific terminology. If you’re unfamiliar with any of these terms, or would like a refresher, in general, make sure to check out other chapters of this Crypto 101 Handbook<\/strong> - there are sections covering all of those concepts in detail!<\/em><\/p>\nLike most blockchains, Avalanche also has a native token called AVAX. It serves as a utility token<\/strong> and has plenty of uses in the Avalanche ecosystem, including transactions, staking, and governance<\/strong>. But I’ll get to that in a minute; right now, let’s stay with the network itself!<\/p>\nSo, like I said, “open-source” is one of the key terms to describe what is AVAX<\/strong>. Very generally speaking, it refers to data sharing and reciprocal operations.<\/p>\nLet’s say you’re doing a homework assignment requiring a lot of research. However, maybe the topic is super difficult, or maybe there just isn’t enough information online. So, naturally, you call your friend in a panic, asking if they found anything for the assignment, and lo and behold - they didn’t.<\/p>\nNow, you’re wondering if you should quit on the assignment altogether or write a mean letter to the teacher, but in the midst of your frustration, you accidentally find a book with the exact information you need. You’re an awesome friend, so knowing your classmates are also struggling, you go online and upload the info on Wikipedia, then send out the link so that everyone can access it.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: Avalanche Network.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-02.jpg/" alt=\"What is AVAX: Avalanche Network.\" width=\"1000\" height=\"815\"><\/p>\nBasically, you make valuable information available to all. This is what’s called interoperability<\/strong> - what you just did by gathering and sharing that info, so it won’t have to be collected again and is attainable to anyone looking for it.<\/p>\nWikipedia, in this instance, is an open-source network, allowing anyone to distribute info, change it, and add to what’s important. In the same way, Avalanche allows its users to submit proposals for protocol changes.<\/p>\nAvalanche is known for tackling one of the main problems in crypto: scalability<\/strong>.  The term refers to the network's capability of expanding and meeting the growing demand without declining its core functionality and features.<\/p>\nLet’s get back to the impossible homework example. So, you’re on your computer, researching intensely. You’re only finding tidbits of information on different sites, but they all seem somewhat useful, so you don’t close any of them, only adding more and more tabs on your browser, and your elderly computer is getting kind of tired. It starts wheezing and heating up, unable to handle such pressure.<\/p>\nPretty frustrated with your computer now, huh?<\/em><\/p>\nWell, in the crypto world, your computer struggling would be called a scaling problem<\/strong>, which many crypto networks face. Crypto activity is largely growing, and many systems are unable to stay fast, cheap, and secure - transactions are declining, the prices are increasing, and the systems keep weakening.<\/p>\nHowever, the AVAX Network managed to come up with a solution<\/strong> - a unique system model that allows exceptional functionality, high speed, and low prices. It’s also one of the several things that make Avalanche so unique!<\/p>\n<h2>What Makes Avalanche Network Unique?<\/h2>\nSo, moving on, let’s see what’s actually so special about AVAX. It might be a bit difficult to grasp, but I’ll attempt to explain it in the easiest way possible!<\/p>\nFirst off, subnets! AVAX subnets are sets of validators working on three individual AVAX blockchain networks <\/strong>that have their own rules and functions, yet remain part of the primary network. It’s like having three employees at the restaurant - a waiter, a chef, and a host. They all have different jobs, but work towards the same goal in the same place, and are all equally important.<\/p>\nTo begin with, we have the X-Chain<\/strong>, known as the Exchange chain. It’s mainly used to create Avalanche-based tokens<\/strong>, both fungible and non-fungible, or what you might know as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-non-fungible-token-nft/">NFTs./n
The second one is called C-Chain, or the Contract chain<\/strong>. It’s super important that you know what is AVAX C-Chain! This one is responsible for hosting smart contracts and enabling the functionality of dApps<\/strong>. In this case, C-Chain is probably the restaurant's chef, the key to the whole operation.<\/p>\nFinally, we have the P-Chain or the Platform chain<\/strong>, which manages the validators. Similarly to other crypto networks, P-Chain allows you to stake <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-avalanche-avax/">AVAX tokens and easily become a transaction validator<\/strong>. Which brings me to my next point!<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: what makes Avalanche Network Unique?\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-03.jpg/" alt=\"What is AVAX: what makes Avalanche Network Unique?\" width=\"1000\" height=\"334\"><\/p>\nAvalanche uses a model called “Subsampled Voting<\/strong>.” Basically, it means that there’s a large number of volunteers who get randomly asked to check some things on the network and reach a unanimous answer.<\/p>\nFor example - the validity of a transaction<\/strong>. A random group of users is asked whether the transaction should be accepted or rejected after the system initially chose to validate it.<\/p>\nWhat happens next is called network gossiping<\/strong>. Quite an amusing name, right?<\/em> Basically, the participants get together to exchange information and opinions until reaching a consensus to accept or deny the transaction.<\/p>\nWhat makes AVAX’s validation system so special is that unlike with <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-proof-of-work-pow/">Proof-of-Work or other <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-proof-of-stake-pos/">Proof-of-Stake mechanisms, the number of nodes, or validators, is irrelevant - the consensus will still be reached<\/strong>.<\/p>\nAnother thing to add to answering what is AVAX is its unusual design<\/strong>. As you’ve probably gathered, AVAX is powered by, well, AVAX, the network’s native token. But what else?<\/p>\nSlush, Snowflake, Snowball, and Avalanche<\/strong>! Did you just imagine a crew of four superhero penguins in a cartoon? Well, the crew is actually called the Snow family<\/strong>, and they are not superhero penguins, but the four mechanisms of the Avalanche protocol. Basically, these four are what you get from combining the Classical consensus and the Nakamoto consensus, as I mentioned in the beginning.<\/p>\nImagine you’re designing the newest iPhone. You want it to be optimized and the best variation there has ever been, of course. So, you take the key functions of the earlier iPhones that still resonate with Apple users, and add the newest features, so that the phone is still familiar, but also up-to-date, too.<\/p>\nThe Snow family combo and unique Avalanche protocol are what made the network secure and easy to scale<\/strong>, eventually leading it to be one of the major crypto sensations.<\/p>\n<h2>Why Does it Rival Ethereum?<\/h2>\nBut does that sensation really pose a threat to the most widespread and usable network of all? The so-called “Global Computer”, Ethereum? Which, by the way, I have a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-ethereum/">whole separate section about<\/strong><\/a>, so I suggest you check it out!<\/em><\/p>\nWe all know that Ethereum has some fancy names associated with it, like the aforementioned “Global Computer<\/strong>” or “Blockchain 2.0<\/strong>”. However, Avalanche, true to its name, has been crashing down on the cryptocurrency world with an even more forceful label - “the future of DeFi”.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: ERC-20.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-04.jpg/" alt=\"What is AVAX: ERC-20.\" width=\"1000\" height=\"1209\"><\/p>\nQuite a majestic name, right? Well, with its unique features, improved protocols, and enormous scalability, the system truly threatens to become “Blockchain 3.0<\/strong>”. And if you’re still doubtful, or still question what is AVAX compared to Ethereum, just allow me to name some basic differences between the two.<\/p>\nFirst of all, Avalanche claims much faster transaction speeds<\/strong> - in one second, AVAX is theoretically able to carry out more than 6,500 transactions, whereas Ethereum can only handle 15. Also, on AVAX, transactions are usually finalized in under three seconds<\/strong>.<\/p>\nNext up, considering DeFi usability, it’s kind of hard to say which is better. For now, sure, Ethereum is much more popular and accepted<\/strong>. The years of trust and high-profile project development did their thing, but with the speed at which Avalanche is growing, ETH is surely facing some serious competition!<\/p>\nThe Avalanche Network is also much harder to attack<\/strong>. I won’t delve into the technicalities, but in short, it would take the attacker controlling 51% of staked assets to breach Ethereum - for AVAX, that number goes up to about 80%.<\/p>\nToken-wise, <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">ETH is winning, of course<\/strong>. It’s hard to replace the second most popular cryptocurrency, after all! However, speaking of tokens, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-avalanche-avax/">AVAX lacks something that ultimately puts Ethereum forward. It’s not compatible with the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-erc-20/">ERC-20 standard<\/strong>. Let me explain.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is AVAX: wrapped AVAX.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-avax-05.jpg/" alt=\"What is AVAX: wrapped AVAX.\" width=\"1000\" height=\"951\"><\/p>\nLet’s say you acquire some AVAX coins. You may want to use them on a crypto application like <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-aave-crypto/">AAVE, which is basically just a platform that allows you to earn interest by lending your crypto. However, AAVE is based on the Ethereum blockchain, and it won’t allow you to do anything with your AVAX, since it’s not compatible with the token standard of ETH, called ERC-20<\/strong>.<\/p>\nDefeat? No! You’ll just have to wrap up your AVAX<\/strong>. But what is wrapped AVAX, then? Actually, “wrapped tokens” are a bit of a complicated topic, but for now, I’ll explain it shortly.<\/p>\nLet’s say you decide to go diving. Obviously, you won’t plunge into the deep end with your trunks and nothing else - you need a diver’s suit for protection and oxygen. So, the suit serves as a tool to help you navigate an environment that’s completely alien to you. Right?<\/p>\nWell, the same can be said about wrapped tokens, as well. Wrapped tokens are a means to communicate between blockchains<\/strong>, so that you could use equivalent native assets of a specific protocol on other, non-compatible ones.<\/p>\n<h2>Wrapping Up<\/h2>\nNow, I have to admit - answering the question of what is AVAX and presenting the many intricacies it has can be a challenge, but let’s recap what we know so far.<\/p>\nAvalanche takes the general trilemma of scalability, security, and decentralization, and addresses it all with its<\/strong> multi-chain design and a unique consensus mechanism<\/strong> - becoming a breath of fresh air in the crypto space! Also, it has its very own native token, AVAX, which you can actually find on your usual crypto exchanges, like <a href=https://www.bitdegree.org/"//crypto//goon//binance/" target=\"_blank\" rel=\"nofollow noindex noopener\">Binance<\/strong><\/a> or <a href=https://www.bitdegree.org/"//crypto//goon//coinbase/" target=\"_blank\" rel=\"nofollow noindex noopener\">Coinbase<\/strong><\/a>.<\/p>\nIn the end, though, Avalanche has many more attributes that are a bit too complicated to tackle in one short section.<\/p>","youtube_video":{"id":107,"channel_id":1,"sort":14,"video_title":"What is AVAX? (Avalanche Network Explained With Animations)","description":"What is AVAX? What is Avalanche Network?\n\nIf you're new to the crypto sphere, AVAX may sound like yet another crypto project. Yet, AVAX is something more. AVAX embodies a new, revolutionary blockchain protocol. And its importance can be illustrated by the fact that AVAX is considered to be among the biggest competitors to such giants as Ethereum.\n\nIn this video, I\u2019ll explain what is AVAX, what is AVAX C-Chain, and what conceptual approach made AVAX so distinct and unique. To explain every detail without missing anything important, I'll rely on real life examples, analogies, and practical instances. You'll understand what makes AVAX so unique and, therefore, important in the DeFi world.\n\nDo you have any experience with AVAX? Do you agree it's one of the main competitors to Ethereum? Share your experience and insights in the comment section below!\n\nVideo Time Table:\n\n0:00 Introduction to What is AVAX\n0:59 What is AVAX?\n3:51 What Makes the Avalanche Network Unique?\n6:42 Why Does it Rival Ethereum?\n9:14 Wrap-up: What is AVAX?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#Avax #AvaxCoin #AvalancheNetwork","video_id":"VxscXKDAGnk","duration":596,"view_count":252,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-avax-avalanche-network-explained-with-animations.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-08-14T15:05:28.000000Z","created_at":"2023-08-14T23:00:14.000000Z","updated_at":"2024-01-09T23:00:03.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}}" :model="{"id":618,"chapter_id":2,"order":19,"featured_image_id":5178,"youtube_video_id":116,"author_id":4,"created_at":"2023-09-04T06:24:32.000000Z","updated_at":"2023-12-28T22:43:04.000000Z","slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","content":"In this section, we’re going to take a look at one of the stealthiest cryptos out there<\/strong>, and answer the questions of “What is Monero coin?<\/em>” and “How does Monero work?<\/em>”.<\/p>\nMonero is where “Cryptocurrency” meets “Cryptography.” It’s a privacy-focused crypto coin that prioritizes different objectives than your usual crypto assets<\/strong>. By providing a laser-sharp focus on the importance of anonymity, <a href=https://www.bitdegree.org/"//crypto//buy-monero-xmr/">Monero gained momentum and a following of those who have no doubts about the importance of such aspects when it comes to blockchains and cryptocurrencies.<\/p>\nBut, by doing so, Monero found itself in the middle of a crossfire<\/strong>. On the one hand, highlighting the importance of anonymity sounds like a non-compromising dedication to protecting user privacy and their data. On the other hand, it’s exactly what criminals want.<\/p>\nIn this section, we’re going to look into the questions of “What is Monero coin?<\/em>”, “What is XMR coin?<\/em>”, and “What does XMR DeFi look like?<\/em>”. Understanding this will allow you to see what is Monero used for, and why it’s popular among people with malicious intentions as well.<\/p>\nWell, let’s wait no more and get straight to the point.<\/em><\/p>\n<h2>What is Monero (XMR?)<\/h2>\nWhen it comes to cryptocurrencies, Monero is the one that’s all dressed in camouflage. It’s the coin where anonymity and privacy reign supreme<\/strong>. Similar to <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin in its decentralized nature, Monero takes anonymity to a whole new level, establishing itself as the go-to choice for those valuing discretion. But to truly answer the question of “What is Monero coin?<\/em>”, we have to take a look at this project’s history.<\/p>\nThe origins of Monero trace back to a moment in 2012 with the release of the CryptoNote whitepaper<\/strong>. Authored by the enigmatic developer known only as Nicolas van Saberhagen<\/strong>, this cryptocurrency research paper unveiled revolutionary cryptographic techniques and introduced a novel electronic cash concept called \"CryptoNote.\"<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: anonymity and privacy.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-01.jpg/" alt=\"What is Monero coin: anonymity and privacy.\" width=\"1000\" height=\"602\"><\/p>\nTaking a bold leap from theory to reality, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-bytecoin-bcn/">Bytecoin became the first cryptocurrency to implement the CryptoNote protocol<\/strong>. But the story didn't end there. In 2014, Bytecoin's codebase experienced a fork, birthing a brand-new currency known as Bitmonero<\/strong>. Over time, Bitmonero transformed into the Monero that we know today.<\/p>\nBy the way, a fork in crypto refers to the process where a blockchain splits into two separate chains, creating a new version of the original cryptocurrency. That’s how Monero was born!<\/p>\nWhat’s interesting about Monero, is the fact that everything that’s Monero-related is at least somehow shrouded in the mist of anonymity<\/strong>. Unlike most conventional cryptocurrencies, Monero has no single founder or CEO at the top of the project. Instead, a core team of developers is responsible for the creation of it. And, no surprises, most of them chose to remain incognito.<\/p>\nAmong the few known names is Riccardo Spagni, known as FluffyPony<\/strong>. For years, he led Monero's development before stepping down in December 2019.<\/p>\nAs an open-source endeavor, Monero relies on the support of its community<\/strong>. Thousands of dedicated individuals worldwide have contributed to the project's growth through Monero's Community Crowdfunding System (CCS)<\/strong>, ensuring this privacy-oriented cryptocurrency does not fade away because of a sudden lack of resources.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: Monero's Community Crowdfunding System (CCS).\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-02.jpg/" alt=\"What is Monero coin: Monero's Community Crowdfunding System (CCS).\" width=\"1000\" height=\"504\"><\/p>\nBut understanding the answer to the question of “What is Monero coin?<\/em>” requires taking a look at why this coin gained popularity as time passed. And, of course, it all comes down to privacy and how Monero approaches it.<\/p>\nWith traditional cryptocurrencies, like Bitcoin, users have public addresses where transactions can be traced back and linked. The recipient's address is exposed to the sender, revealing the number of coins they hold, and all transfers are recorded and made public on the blockchain.<\/p>\nBut here's where Monero saw an opportunity and grabbed it. They realized that this is not ideal. When you transact with Monero, you don't get an all-access pass to the recipient's holdings, even if you have their public address<\/strong>. Monero's transactions are cleverly designed to be unlinkable and untraceable. Each coin sent to a recipient takes a detour through a randomly generated address, tailored exclusively for that transaction.<\/p>\nUnlike traditional blockchains, Monero's ledger doesn't reveal the true sender and recipient's stealth addresses<\/strong>. The one-time address created for each transaction remains disconnected from the parties' actual addresses, leaving no footsteps for curious online sleuths and detectives to follow. The result? Complete confidentiality for all past and present transactions within the Monero network.<\/p>\nNow, let’s take a deeper look at how does Monero work, because, as you can see, it’s what makes it so different.<\/em><\/p>\n<h2>How Does Monero Do It?<\/h2>\nMonero uses three innovative technological solutions. They’re called ring signatures, stealth addresses, and confidential transactions. Here's a brief rundown of each element.<\/p>\nRing signatures are used to hide the sender's identity<\/strong>. When a transaction occurs, multiple possible senders are mixed together in a \"ring,\" making it impossible to determine which one is the actual sender. It's like a cloak of invisibility for your transaction! But hey, let’s use a more real-life example.<\/p>\nImagine you and your close friends decide to send a surprise gift to someone, but you want to keep it a secret who exactly contributed to the gift. So, each of you write your name on a piece of paper and put it into a hat. Then, one of your friends takes out all the pieces of paper, shuffles them, and randomly picks one piece without looking at it.<\/p>\nThe name on the chosen paper becomes the \"signature\" on the gift<\/strong>. Even though everyone contributed, no one knows who specifically gave what, maintaining the surprise and secrecy. Ring signatures work similarly by mixing multiple senders' signatures, making it impossible to tell who exactly sent the transaction.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: ring signatures, stealth addresses, and confidential transactions.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-03.jpg/" alt=\"What is Monero coin: ring signatures, stealth addresses, and confidential transactions.\" width=\"1000\" height=\"487\"><\/p>\nWith stealth addresses, the recipient's public address is obscured<\/strong>. Each transaction generates a one-time address for the recipient, keeping their identity hidden from possible external, unrelated onlookers.<\/p>\nThink of stealth addresses as a temporary forwarding address for your mail<\/strong>. Let's say you're a YouTuber, and you want to open your P.O. Box for the viewers, so they could send you gifts and stuff. Thus, you provide them with a special address that’s designated to receive parcels from strangers, but it’s not your home address.<\/p>\nBy doing so, you remain accessible, yet you manage to keep your actual location hidden, because you don’t want to put sensitive personal data out there for anyone. Stealth addresses work similarly by generating unique, one-time addresses for each transaction<\/strong>, protecting the recipient's real address.<\/p>\nAnd when it comes to Confidential Transactions, Monero uses them to hide the transaction amount<\/strong>. It employs cryptographic methods to ensure that only the sender and recipient know how much was sent, while outsiders are left in the dark.<\/p>\n<img title=\"What is Monero coin: confidential transactions.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-04.jpg/" alt=\"What is Monero coin: confidential transactions.\" width=\"1000\" height=\"584\"><\/p>\nPicture a store where the price tags are covered with scratch-off material. When you buy something, the cashier removes the scratch-off to reveal the price, and you pay the amount. However, other customers in the store can't see the original price, only the final amount you paid.<\/p>\nThis way, you can make purchases without revealing the exact price to others. Confidential transactions work similarly by hiding the exact transaction amounts<\/strong>, so only the sender and receiver know the actual values, while outside observers see encrypted or distorted information.<\/p>\nBy combining these privacy features, Monero managed to take anonymity to a whole new level. No wonder it's become a top choice for privacy-conscious individuals<\/strong> in the crypto world! And, whether we like it or not, that’s the reason why headlines like “The Criminal Underworld Is Dropping Bitcoin for Another Currency<\/em>” started popping up a few years ago.<\/p>\n<h2>What is XMR?<\/h2>\nAt this point, we've answered the questions of “What is Monero?<\/em>” and “How does Monero work?<\/em>”, but we haven’t yet touched upon the question of “What is XMR coin?<\/em>”. So, let’s do that right now, since XMR is inseparable from Monero.<\/p>\nIn its very essence, XMR is the ticker symbol for Monero<\/strong>. Think of XMR as the code name for Monero, just like BTC is for Bitcoin. So, whenever you hear people talking about XMR, they're referring to Monero.<\/p>\nLet’s address the tokenomics of XMR<\/strong>, the <a href=https://www.bitdegree.org/"//crypto//buy-monero-xmr/">Monero token<\/strong><\/a>, so you have a better understanding of how this project looks when it comes to practical matters.<\/p>\nMonero's tokenomics are carefully designed to achieve several key objectives: maintaining scarcity and value appreciation through a capped supply<\/strong>, incentivizing miners through a dynamic emission rate and a tail emission mechanism<\/strong>, and ensuring decentralized mining through ASIC resistance<\/strong>.<\/p>\nAs you can see, miners play a role within Monero’s ecosystem, because it runs on a variant of the Proof-of-Work algorithm<\/strong>.<\/p>\nTo learn more about PoW, be sure to <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-proof-of-stake-vs-proof-of-work/">check out this section<\/a>.<\/em><\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: deflationary asset.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-05.jpg/" alt=\"What is Monero coin: deflationary asset.\" width=\"1000\" height=\"565\"><\/em><\/p>\nSo, the combination of these said features aims to strike a balance between rewarding early participants and securing the network's long-term sustainability<\/strong>. Monero's approach to tokenomics contributes to its appeal as a privacy-focused cryptocurrency.<\/p>\nThe question of Monero's tokenomics begins with the total supply of XMR coins. Similar to Bitcoin, Monero has a capped supply to ensure scarcity and value retention. The total supply of XMR is capped at approximately 18.4 million coins<\/strong>. This means that once this number is reached, no new XMR coins will be created. The controlled supply makes Monero a deflationary asset<\/strong>, which may contribute to its potential long-term value appreciation.<\/p>\nMonero's emission rate was designed to ensure a fair distribution of coins over time<\/strong>. In the early days of Monero, the emission rate was higher, gradually decreasing as the network matured. This approach helped incentivize early adopters, including miners, while also ensuring that XMR doesn't flood the market all at once, which could adversely affect its value.<\/p>\nThe emission rate decreased smoothly until it eventually ended in 2022, when the last coin was created.<\/p>\nAs mentioned previously, Monero runs on a Proof-of-Work consensus mechanism. This means that it relies on miners<\/strong>. Miners use computational power to validate transactions and create new blocks on the blockchain.<\/p>\nUnlike some other cryptocurrencies, Monero's PoW algorithm is designed to be ASIC-resistant<\/strong>, meaning it aims to prevent specialized mining hardware from dominating the network. This allows for a more decentralized mining process and wider participation among individual miners.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: tail emission.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-06.jpg/" alt=\"What is Monero coin: tail emission.\" width=\"1000\" height=\"516\"><\/p>\nAnd, as it’s usually the case with PoW blockchains, as miners validate transactions and add blocks to the blockchain, they are rewarded with newly minted XMR coins<\/strong>. The block reward serves as an incentive for miners to participate in securing the network and maintaining its integrity. However, it's important to note that the block reward decreases over time due to the dynamic emission rate<\/strong> mentioned earlier.<\/p>\nIn addition to the block reward, miners also earn transaction fees<\/strong> for including transactions in the blocks they mine. Transaction fees act as an additional incentive for miners and help support the network's security and operations. The fees vary depending on the size and urgency of the transaction and serve as a means to prioritize transactions in the blockchain.<\/p>\nThere’s one more thing about Monero. As I said previously, Monero has a fixed supply, and it has already reached the point when the last coin is already mined<\/strong>. But there’s a twist.<\/p>\nUnlike some cryptocurrencies that have a fixed supply, Monero has a \"tail emission\" mechanism<\/strong>. This means that even after the maximum supply of XMR is reached, a small block reward continues to be given to miners in perpetuity.<\/p>\nThis ensures that there is always an incentive for miners to secure the network<\/strong>, even when the block reward from newly minted coins becomes negligible. The tail emission also helps maintain a constant level of inflation to encourage circulation and spending of XMR.<\/p>\n<h2>Wrapping Up<\/h2>\nSo, by now, it’s safe to say that we have touched upon Monero DeFi and got Monero explained. We’ve answered the questions of “What is Monero coin?<\/em>” and “How does Monero work?<\/em>”. As you can see, when you understand what the Monero meaning is, the questions about <a href=https://www.bitdegree.org/"//crypto//buy-monero-xmr/">XMR become superfluous.<\/p>","definition":"Did you know that ring signatures, stealth addresses, and confidential transactions are the three mechanisms that make Monero private?","status":"published","meta_title":"What is Monero Coin (XMR) and What is It Used For?","meta_description":"What is Monero coin (XMR)? How does Monero work? What is it used for? Find answers to these and many other related questions right here!","meta_keywords":"what is monero coin, how does monero work, what is monero coin, what is xmr coin, what is monero used for, monero token, monero defi, xmr defi, monero meaning, monero explained,","modified_content":"In this section, we’re going to take a look at one of the stealthiest cryptos out there<\/strong>, and answer the questions of “What is Monero coin?<\/em>” and “How does Monero work?<\/em>”.<\/p>\nMonero is where “Cryptocurrency” meets “Cryptography.” It’s a privacy-focused crypto coin that prioritizes different objectives than your usual crypto assets<\/strong>. By providing a laser-sharp focus on the importance of anonymity, <a href=https://www.bitdegree.org/"//crypto//buy-monero-xmr/">Monero gained momentum and a following of those who have no doubts about the importance of such aspects when it comes to blockchains and cryptocurrencies.<\/p>\nBut, by doing so, Monero found itself in the middle of a crossfire<\/strong>. On the one hand, highlighting the importance of anonymity sounds like a non-compromising dedication to protecting user privacy and their data. On the other hand, it’s exactly what criminals want.<\/p>\nIn this section, we’re going to look into the questions of “What is Monero coin?<\/em>”, “What is XMR coin?<\/em>”, and “What does XMR DeFi look like?<\/em>”. Understanding this will allow you to see what is Monero used for, and why it’s popular among people with malicious intentions as well.<\/p>\nWell, let’s wait no more and get straight to the point.<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is Monero? XMR Animated Explainer\"\n title=\"What is Monero? XMR Animated Explainer\" class=\"border-0\">\n Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Monero: Where Cryptocurrency Meets Cryptography<\/h4>\n Reading is not your thing? Watch the \"Monero: Where Cryptocurrency Meets Cryptography\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"OAFAzBoFHAc\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n What is Monero? XMR Animated Explainer<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-monero-xmr-animated-explainer.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-monero-xmr-animated-explainer.jpg?tr=w-760 1000w\"\n alt=\"What is Monero? XMR Animated Explainer\"\n title=\"What is Monero? XMR Animated Explainer\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What is Monero? XMR Animated Explainer\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n SUBSCRIBE \n ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What is Monero (XMR?)<\/h2>\nWhen it comes to cryptocurrencies, Monero is the one that’s all dressed in camouflage. It’s the coin where anonymity and privacy reign supreme<\/strong>. Similar to <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin in its decentralized nature, Monero takes anonymity to a whole new level, establishing itself as the go-to choice for those valuing discretion. But to truly answer the question of “What is Monero coin?<\/em>”, we have to take a look at this project’s history.<\/p>\nThe origins of Monero trace back to a moment in 2012 with the release of the CryptoNote whitepaper<\/strong>. Authored by the enigmatic developer known only as Nicolas van Saberhagen<\/strong>, this cryptocurrency research paper unveiled revolutionary cryptographic techniques and introduced a novel electronic cash concept called \"CryptoNote.\"<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: anonymity and privacy.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-01.jpg/" alt=\"What is Monero coin: anonymity and privacy.\" width=\"1000\" height=\"602\"><\/p>\nTaking a bold leap from theory to reality, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-bytecoin-bcn/">Bytecoin became the first cryptocurrency to implement the CryptoNote protocol<\/strong>. But the story didn't end there. In 2014, Bytecoin's codebase experienced a fork, birthing a brand-new currency known as Bitmonero<\/strong>. Over time, Bitmonero transformed into the Monero that we know today.<\/p>\nBy the way, a fork in crypto refers to the process where a blockchain splits into two separate chains, creating a new version of the original cryptocurrency. That’s how Monero was born!<\/p>\nWhat’s interesting about Monero, is the fact that everything that’s Monero-related is at least somehow shrouded in the mist of anonymity<\/strong>. Unlike most conventional cryptocurrencies, Monero has no single founder or CEO at the top of the project. Instead, a core team of developers is responsible for the creation of it. And, no surprises, most of them chose to remain incognito.<\/p>\nAmong the few known names is Riccardo Spagni, known as FluffyPony<\/strong>. For years, he led Monero's development before stepping down in December 2019.<\/p>\nAs an open-source endeavor, Monero relies on the support of its community<\/strong>. Thousands of dedicated individuals worldwide have contributed to the project's growth through Monero's Community Crowdfunding System (CCS)<\/strong>, ensuring this privacy-oriented cryptocurrency does not fade away because of a sudden lack of resources.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: Monero's Community Crowdfunding System (CCS).\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-02.jpg/" alt=\"What is Monero coin: Monero's Community Crowdfunding System (CCS).\" width=\"1000\" height=\"504\"><\/p>\nBut understanding the answer to the question of “What is Monero coin?<\/em>” requires taking a look at why this coin gained popularity as time passed. And, of course, it all comes down to privacy and how Monero approaches it.<\/p>\nWith traditional cryptocurrencies, like Bitcoin, users have public addresses where transactions can be traced back and linked. The recipient's address is exposed to the sender, revealing the number of coins they hold, and all transfers are recorded and made public on the blockchain.<\/p>\nBut here's where Monero saw an opportunity and grabbed it. They realized that this is not ideal. When you transact with Monero, you don't get an all-access pass to the recipient's holdings, even if you have their public address<\/strong>. Monero's transactions are cleverly designed to be unlinkable and untraceable. Each coin sent to a recipient takes a detour through a randomly generated address, tailored exclusively for that transaction.<\/p>\nUnlike traditional blockchains, Monero's ledger doesn't reveal the true sender and recipient's stealth addresses<\/strong>. The one-time address created for each transaction remains disconnected from the parties' actual addresses, leaving no footsteps for curious online sleuths and detectives to follow. The result? Complete confidentiality for all past and present transactions within the Monero network.<\/p>\nNow, let’s take a deeper look at how does Monero work, because, as you can see, it’s what makes it so different.<\/em><\/p>\n<h2>How Does Monero Do It?<\/h2>\nMonero uses three innovative technological solutions. They’re called ring signatures, stealth addresses, and confidential transactions. Here's a brief rundown of each element.<\/p>\nRing signatures are used to hide the sender's identity<\/strong>. When a transaction occurs, multiple possible senders are mixed together in a \"ring,\" making it impossible to determine which one is the actual sender. It's like a cloak of invisibility for your transaction! But hey, let’s use a more real-life example.<\/p>\nImagine you and your close friends decide to send a surprise gift to someone, but you want to keep it a secret who exactly contributed to the gift. So, each of you write your name on a piece of paper and put it into a hat. Then, one of your friends takes out all the pieces of paper, shuffles them, and randomly picks one piece without looking at it.<\/p>\nThe name on the chosen paper becomes the \"signature\" on the gift<\/strong>. Even though everyone contributed, no one knows who specifically gave what, maintaining the surprise and secrecy. Ring signatures work similarly by mixing multiple senders' signatures, making it impossible to tell who exactly sent the transaction.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: ring signatures, stealth addresses, and confidential transactions.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-03.jpg/" alt=\"What is Monero coin: ring signatures, stealth addresses, and confidential transactions.\" width=\"1000\" height=\"487\"><\/p>\nWith stealth addresses, the recipient's public address is obscured<\/strong>. Each transaction generates a one-time address for the recipient, keeping their identity hidden from possible external, unrelated onlookers.<\/p>\nThink of stealth addresses as a temporary forwarding address for your mail<\/strong>. Let's say you're a YouTuber, and you want to open your P.O. Box for the viewers, so they could send you gifts and stuff. Thus, you provide them with a special address that’s designated to receive parcels from strangers, but it’s not your home address.<\/p>\nBy doing so, you remain accessible, yet you manage to keep your actual location hidden, because you don’t want to put sensitive personal data out there for anyone. Stealth addresses work similarly by generating unique, one-time addresses for each transaction<\/strong>, protecting the recipient's real address.<\/p>\nAnd when it comes to Confidential Transactions, Monero uses them to hide the transaction amount<\/strong>. It employs cryptographic methods to ensure that only the sender and recipient know how much was sent, while outsiders are left in the dark.<\/p>\n<img title=\"What is Monero coin: confidential transactions.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-04.jpg/" alt=\"What is Monero coin: confidential transactions.\" width=\"1000\" height=\"584\"><\/p>\nPicture a store where the price tags are covered with scratch-off material. When you buy something, the cashier removes the scratch-off to reveal the price, and you pay the amount. However, other customers in the store can't see the original price, only the final amount you paid.<\/p>\nThis way, you can make purchases without revealing the exact price to others. Confidential transactions work similarly by hiding the exact transaction amounts<\/strong>, so only the sender and receiver know the actual values, while outside observers see encrypted or distorted information.<\/p>\nBy combining these privacy features, Monero managed to take anonymity to a whole new level. No wonder it's become a top choice for privacy-conscious individuals<\/strong> in the crypto world! And, whether we like it or not, that’s the reason why headlines like “The Criminal Underworld Is Dropping Bitcoin for Another Currency<\/em>” started popping up a few years ago.<\/p>\n<h2>What is XMR?<\/h2>\nAt this point, we've answered the questions of “What is Monero?<\/em>” and “How does Monero work?<\/em>”, but we haven’t yet touched upon the question of “What is XMR coin?<\/em>”. So, let’s do that right now, since XMR is inseparable from Monero.<\/p>\nIn its very essence, XMR is the ticker symbol for Monero<\/strong>. Think of XMR as the code name for Monero, just like BTC is for Bitcoin. So, whenever you hear people talking about XMR, they're referring to Monero.<\/p>\nLet’s address the tokenomics of XMR<\/strong>, the <a href=https://www.bitdegree.org/"//crypto//buy-monero-xmr/">Monero token<\/strong><\/a>, so you have a better understanding of how this project looks when it comes to practical matters.<\/p>\nMonero's tokenomics are carefully designed to achieve several key objectives: maintaining scarcity and value appreciation through a capped supply<\/strong>, incentivizing miners through a dynamic emission rate and a tail emission mechanism<\/strong>, and ensuring decentralized mining through ASIC resistance<\/strong>.<\/p>\nAs you can see, miners play a role within Monero’s ecosystem, because it runs on a variant of the Proof-of-Work algorithm<\/strong>.<\/p>\nTo learn more about PoW, be sure to <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-proof-of-stake-vs-proof-of-work/">check out this section<\/a>.<\/em><\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: deflationary asset.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-05.jpg/" alt=\"What is Monero coin: deflationary asset.\" width=\"1000\" height=\"565\"><\/em><\/p>\nSo, the combination of these said features aims to strike a balance between rewarding early participants and securing the network's long-term sustainability<\/strong>. Monero's approach to tokenomics contributes to its appeal as a privacy-focused cryptocurrency.<\/p>\nThe question of Monero's tokenomics begins with the total supply of XMR coins. Similar to Bitcoin, Monero has a capped supply to ensure scarcity and value retention. The total supply of XMR is capped at approximately 18.4 million coins<\/strong>. This means that once this number is reached, no new XMR coins will be created. The controlled supply makes Monero a deflationary asset<\/strong>, which may contribute to its potential long-term value appreciation.<\/p>\nMonero's emission rate was designed to ensure a fair distribution of coins over time<\/strong>. In the early days of Monero, the emission rate was higher, gradually decreasing as the network matured. This approach helped incentivize early adopters, including miners, while also ensuring that XMR doesn't flood the market all at once, which could adversely affect its value.<\/p>\nThe emission rate decreased smoothly until it eventually ended in 2022, when the last coin was created.<\/p>\nAs mentioned previously, Monero runs on a Proof-of-Work consensus mechanism. This means that it relies on miners<\/strong>. Miners use computational power to validate transactions and create new blocks on the blockchain.<\/p>\nUnlike some other cryptocurrencies, Monero's PoW algorithm is designed to be ASIC-resistant<\/strong>, meaning it aims to prevent specialized mining hardware from dominating the network. This allows for a more decentralized mining process and wider participation among individual miners.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Monero coin: tail emission.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-monero-coin-06.jpg/" alt=\"What is Monero coin: tail emission.\" width=\"1000\" height=\"516\"><\/p>\nAnd, as it’s usually the case with PoW blockchains, as miners validate transactions and add blocks to the blockchain, they are rewarded with newly minted XMR coins<\/strong>. The block reward serves as an incentive for miners to participate in securing the network and maintaining its integrity. However, it's important to note that the block reward decreases over time due to the dynamic emission rate<\/strong> mentioned earlier.<\/p>\nIn addition to the block reward, miners also earn transaction fees<\/strong> for including transactions in the blocks they mine. Transaction fees act as an additional incentive for miners and help support the network's security and operations. The fees vary depending on the size and urgency of the transaction and serve as a means to prioritize transactions in the blockchain.<\/p>\nThere’s one more thing about Monero. As I said previously, Monero has a fixed supply, and it has already reached the point when the last coin is already mined<\/strong>. But there’s a twist.<\/p>\nUnlike some cryptocurrencies that have a fixed supply, Monero has a \"tail emission\" mechanism<\/strong>. This means that even after the maximum supply of XMR is reached, a small block reward continues to be given to miners in perpetuity.<\/p>\nThis ensures that there is always an incentive for miners to secure the network<\/strong>, even when the block reward from newly minted coins becomes negligible. The tail emission also helps maintain a constant level of inflation to encourage circulation and spending of XMR.<\/p>\n<h2>Wrapping Up<\/h2>\nSo, by now, it’s safe to say that we have touched upon Monero DeFi and got Monero explained. We’ve answered the questions of “What is Monero coin?<\/em>” and “How does Monero work?<\/em>”. As you can see, when you understand what the Monero meaning is, the questions about <a href=https://www.bitdegree.org/"//crypto//buy-monero-xmr/">XMR become superfluous.<\/p>","youtube_video":{"id":116,"channel_id":1,"sort":12,"video_title":"What is Monero? XMR Animated Explainer","description":"What is Monero coin in crypto?\n\nMonero is a project that you\u2019ll definitely come across, in your crypto journey. However, it\u2019s also one that\u2019s shrouded in a lot of mystery and speculation. Monero is also very two-sided - on the one hand, it features some industry-leading functionality. On the other hand, this creates potential for it to be used for illicit activities.\n\nIn this video, I\u2019ll tell you all about what is Monero coin (XMR), and what this project is all about, in general. You will learn what makes Monero so special, and why the unique functionality of this project is often viewed as both a blessing and a curse.\n\nDo you hold any Monero? Have you heard about the project before? Share your thoughts, in the comments section below!\n\nVideo Time Table:\n\n0:00 Introduction to What is Monero Coin?\n1:08 What is Monero?\n4:10 How Does Monero Work?\n6:48 What is XMR?\n10:29 Wrap-up: What is Monero & XMR?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained\n\n#Monero #XMR #WhatisMonero","video_id":"OAFAzBoFHAc","duration":676,"view_count":167,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-monero-xmr-animated-explainer.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-09-01T14:40:37.000000Z","created_at":"2023-09-01T23:00:10.000000Z","updated_at":"2024-01-09T23:00:03.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}},"featured_image":{"id":5178,"uuid":"00283ef5-608d-4fe2-8198-c5ad9633cf96","name":"what-is-monero-coin-featured-image.jpg","url":"https:\/\/assets.bitdegree.org\/images\/what-is-monero-coin-featured-image.jpg","path":"images\/what-is-monero-coin-featured-image.jpg","mime_type":"image\/jpeg","disk":"digitalOceanSpaces","size":92607,"width":1024,"height":576,"custom_properties":null,"created_at":"2023-09-04T06:26:52.000000Z","updated_at":"2023-09-04T06:26:52.000000Z"}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin Killer","status":"published","modified_content":null},{"chapter_id":2,"order":10,"slug":"what-is-solana-in-crypto","title":"Is Solana an Improved Version of Ethereum?","status":"published","modified_content":null},{"chapter_id":2,"order":11,"slug":"what-is-polkadot-in-crypto","title":"The Bridge Between Blockchains: Polkadot","status":"published","modified_content":null},{"chapter_id":2,"order":12,"slug":"what-is-polygon-in-crypto","title":"Polygon: the Essential Scaling Solution for Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":13,"slug":"what-is-luna-crypto","title":"The Bumpy Road of Terra (LUNA)","status":"published","modified_content":null},{"chapter_id":2,"order":14,"slug":"what-is-fantom-crypto","title":"Is Fantom (FTM) Yet Another Ethereum Killer?","status":"published","modified_content":null},{"chapter_id":2,"order":15,"slug":"what-is-aave-crypto","title":"Aave: Crypto Lending Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of Crypto","status":"published","modified_content":null}]},{"id":3,"title":"Crypto Exchanges","slug":"crypto-exchanges","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-exchanges.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-exchanges-101.jpg","rating":80,"sections":[{"chapter_id":3,"order":1,"slug":"how-do-cryptocurrency-exchanges-work","title":"How do Cryptocurrency Exchanges Work?","status":"published","modified_content":null},{"chapter_id":3,"order":2,"slug":"dex-vs-cex","title":"DEX VS CEX: Two Sides of the Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":3,"order":3,"slug":"crypto-day-trading","title":"Crypto Day Trading: The Difference Between Buying, Trading, and Swapping","status":"published","modified_content":null},{"chapter_id":3,"order":4,"slug":"kyc-crypto","title":"KYC & AML: The Key to Complying With Legal Industry Standards","status":"published","modified_content":null},{"chapter_id":3,"order":5,"slug":"how-to-buy-crypto","title":"From Fiat to Crypto: How to Buy Crypto for the First Time","status":"published","modified_content":null},{"chapter_id":3,"order":6,"slug":"fiat-to-crypto","title":"Taking Profits: Turning Crypto Into Fiat","status":"published","modified_content":null},{"chapter_id":3,"order":7,"slug":"how-to-use-crypto","title":"You\u2019ve Got Crypto: What Can You Do With It?","status":"published","modified_content":null}]},{"id":4,"title":"Crypto Wallets","slug":"crypto-wallets","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-wallets.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-wallets-101.jpg","rating":80,"sections":[{"chapter_id":4,"order":1,"slug":"what-is-a-crypto-wallet","title":"What is a Crypto Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: The Ins and Outs","status":"published","modified_content":null},{"chapter_id":5,"order":3,"slug":"buying-nft","title":"Tips and Tricks of Choosing the Right NFTs","status":"published","modified_content":null},{"chapter_id":5,"order":4,"slug":"how-to-store-nft","title":"How to Store NFTs: Best Practices","status":"published","modified_content":null},{"chapter_id":5,"order":5,"slug":"how-to-create-an-nft","title":"How to Create Your Own NFTs?","status":"published","modified_content":null},{"chapter_id":5,"order":6,"slug":"how-to-make-passive-money-with-nft","title":"Making Passive Money with NFTs","status":"published","modified_content":null}]},{"id":6,"title":"dApps & Defi","slug":"dapps-and-defi","updated":true,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-dapps.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/dapps-defi-101.jpg","rating":80,"sections":[{"chapter_id":6,"order":1,"slug":"what-are-nfts","title":"What are Non-Fungible Tokens (NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart 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Date","status":"published","modified_content":null},{"chapter_id":7,"order":8,"slug":"what-is-fud","title":"What is FUD: How to Use It to Your Advantage While Investing in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":9,"slug":"investing-in-cryptocurrency","title":"Investing in Cryptocurrency: How to Manage Your Risks?","status":"published","modified_content":null},{"chapter_id":7,"order":10,"slug":"what-is-a-rug-pull-in-crypto","title":"What is a Rug Pull in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":11,"slug":"how-to-avoid-rug-pulls-in-crypto","title":"How to Spot and Avoid Rug Pulls?","status":"published","modified_content":null},{"chapter_id":7,"order":12,"slug":"how-to-avoid-crypto-taxes","title":"The Key Legal Techniques of Avoiding Crypto Taxes","status":"published","modified_content":null}]},{"id":8,"title":"Crypto 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Tokens?","status":"published","modified_content":null},{"chapter_id":8,"order":5,"slug":"how-to-research-crypto","title":"Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy","status":"published","modified_content":null},{"chapter_id":8,"order":46,"slug":"portfolio-diversification-definition","title":"Portfolio Diversification: The Whats, the Whys, and the Hows","status":"published","modified_content":null}]},{"id":9,"title":"Mining","slug":"mining","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-mining.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-mining-101.jpg","rating":80,"sections":[{"chapter_id":9,"order":1,"slug":"what-is-crypto-mining","title":"Crypto Mining: What It is and How Does It Work?","status":"published","modified_content":null},{"chapter_id":9,"order":2,"slug":"what-is-a-mining-pool","title":"Mining Pools: Is Collective Mining Better Than Solo Mining?","status":"published","modified_content":null},{"chapter_id":9,"order":3,"slug":"what-is-staking-crypto","title":"An Advanced Look into What is Staking Crypto","status":"published","modified_content":null},{"chapter_id":9,"order":4,"slug":"what-is-proof-of-stake-vs-proof-of-work","title":"Proof-of-Work VS Proof-of-Stake: The Differences That Matter","status":"published","modified_content":null},{"chapter_id":9,"order":5,"slug":"what-is-crypto-mining-rig","title":"Crypto Mining Rig: What It is and How to Build One?","status":"published","modified_content":null}]},{"id":10,"title":"Crypto Terms","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/crypto-101-glossary.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}]" current-chapter="cryptocurrencies" current-section="what-is-monero-coin">

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