Bitcoin and Monero are two popular cryptocurrencies currently seeing high demand on the crypto market. For those new to cryptocurrencies, it may be tempting to think of them as one in the same; indeed, they do have many similarities. But with those similarities comes a number of differences. Here are six similarities and differences you should know when discussing Monero vs Bitcoin.
Similarity: They’re Both Cryptocurrencies
Monero and Bitcoin are both varying types of cryptocurrencies. Bitcoin, the oldest of the two cryptos, was first introduced in January 2009, whilst the newer Monero was launched in April 2014. Both cryptocurrencies are listed among the top 20 cryptos in use worldwide, and both continue to gain popularity.
Difference: Anonymous Versus ‘Pseudonymous’ Privacy
Both Monero and Bitcoin have high levels of transaction privacy, but the level of privacy is not exactly the same. Monero uses a completely anonymous approach to privacy, meaning information about the transaction’s origin can never be traced. Monero’s privacy is set as a default, and it uses a number of built-in privacy controls to keep transactions completely anonymous, including:
- Ring signatures
- Ring confidential transactions (RingCT) technique
- Stealth addresses
Bitcoin, on the other hand, is ‘pseudonymous’. You could compare sending a Bitcoin transaction to writing under a pseudonym. Once the identity of the sender is discovered from one transaction, all transactions sent by that same user can be traced back to them. All Bitcoin transaction information is stored in the blockchain using a personally identifiable address. In this way, Bitcoin is traceable, whereas Monero is not.
Similarity: They’re Both Decentralised
Monero and Bitcoin are both decentralised cryptocurrencies. This means that no central authority or third party is involved in the sending and receiving of transactions. Instead, all transactions are completed through peer-to-peer exchanges. As decentralised cryptocurrencies, both Monero and Bitcoin are virtually unaffected by national boundaries and can be used by the global community.
Difference: One Is Fungible, The Other Is Not
Monero is fungible. This means that any one Monero (or XMR) coin is identical to another. Think of Monero as you might gold: one ounce of gold has the same equal value as any other one ounce of gold. It doesn’t matter where that one ounce of gold originated — in fact, you may not even be able to trace its point of origin. Likewise, if a Monero user exchanges one XMR coin, that coin has the same value as any other XMR coin — and its origin is completely untraceable.
Now contrast that with Bitcoin. One Bitcoin (or BTC) has the same value as any other Bitcoin. However, because a Bitcoin is registered on the blockchain, that particular coin’s history can be traced to its origin, and each transaction made with that coin has been recorded.
Similarity: Both Cryptos Are Mineable
Both Monero and Bitcoin are mined coins. This means they are produced through ‘mining’ — that is, leveraging a computer’s power to solve maths problems to produce a certain number of coins in exchange for solving. Both Monero and Bitcoin allow individual users to mine their coins, and users of both currencies help to approve transactions to keep their individual networks safe, secure and fair for all users.
Difference: Coin Supply
One of the greatest differences in Monero and Bitcoin is the number of coins available for use. Bitcoin has capped their coins at 21 million tokens. Monero, on the other hand, has no fixed token limit and will continue to produce coins at a fixed rate of 0.3 XMR per minute.
As you can see, both Monero and Bitcoin have several similarities and differences. If you’re looking for a free and secure online wallet to safely store your Monero coins, give XMR Wallet a try.