Besides Grin, Dash, and Zcash, Monero (XMR) is one of the most significant privacy-oriented cryptocurrencies. The project aims to utilize the power of blockchain technology but to obscure transactions by hiding them behind cryptographic constructions, making it impossible to track funds.
Some hold the view that Monero will eventually be banned and lose its value, but the community behind it believes that the project will thrive once we reach adoption and privacy becomes an issue.
Here is a short guide for buying XMR if you already have a Binance account.
- Set up a Monero-supported wallet (Monero GUI Wallet for example)
- Copy your wallet address
- Visit Binance
- Purchase Bitcoin or Ether
- Search for the XMR/BTC or XMR/ETH pair
- Create a market order for a custom amount of XMR
- Withdraw XMR to your copied wallet address
How to Buy Monero
Monero has the goal to add an additional layer to cryptocurrencies – privacy. While at the moment we have not reached adoption payment-wise, we may need to wary of having the transactions we made linked to our real identity. For that purpose, the project plans to remove traceability by using cryptographic methods.
According to data provided by CoinMarketCap, Monero (XMR) hit an all-time low of $0.21 in January 2015 and reached an all-time high of $495 in January 2018. At the time of writing, Monero is ranked 10th on the cryptocurrency leaderboard.
Although the project has a hacker-esque tone, buying Monero is as easy and safe as purchasing any other cryptocurrency on the market. Don’t worry about getting your wallet hacked.
Before you buy Monero, make a deposit in either Bitcoin or Ether. There are no fiat pairs available on reputable exchanges.
If you are unable to access Binance, you can purchase XMR on HitBTC, Huobi, and Kraken.
If you haven’t previously used cryptocurrency exchanges, we have prepared a more detailed guide below.
Detailed Monero Buying guide
Phase 1 – Create a wallet
Monero is actively praised for its active developer community. Bugs that could potentially hurt their blockchain networks are regularly reported and fixed on time. The same case can be seen in several popular wallets that support XMR. There is even an official wallet created by Monero developers if you prefer the most up-to-date option.
Here is a list of the most commonly used XMR wallets:
Ledger Nano X Hardware Wallet
Released in 2019 at a price of only $119, the Ledger Nano X represents one of the most technologically advanced ways to store cryptocurrencies. Although you actually need to invest in a cold wallet, they are one of the safest ways to store your digital assets, while ensuring that you are the actual owner of them. Compared to holding XMR on an exchange, no one will track your transactions on a hardware wallet.
If you are looking to acquire other cryptocurrencies, you can more than 1,000 assets on the Ledger Nano X. If you prefer a cheaper but equally-safe option, you can purchase the Ledger Nano S. Keep in mind that the native wallet on the Nano S does not support Monero, you will have to connect the Nano S with a software wallet.
Binance Exchange Wallet
If you prefer the simplicity of crypto exchanges, you can buy XMR on Binance through trading pairs such as XMR/BTC, XMR/ETH, and XMR/USDT. Binance has several security measures in place that protect your assets from hackers.
While you technically lose the privacy part of owning XMR on an exchange, you will benefit from a safety feature named SAFU (Secure Asset Fund for Users). In the case that someone steals your XMR, Binance will return the amount of XMR you owned.
Monero GUI Wallet
Created by the official Monero team, the Monero GUI wallet is a ‘heavy wallet’, which means that you will need to run an entire node in order to use it. Simply said, you will have to download Monero’s blockchain network on your PC
Although time-consuming, setting up the wallet is relatively easy. After downloading the blockchain network, your PC will synchronize with the blockchain in order to properly process transactions and access the network. It may take up to a few hours, but after that, you are ready to make a private transaction after saving your 25-word seed phrase.
Monero Offline Wallet
If you’re familiar with the sector, you will probably want to create a paper wallet for additional security. Paper wallets are a simple and free way to store your wallet on just a piece of paper.
The recommended paper wallet generator for Monero is the Monero Offline Wallet. You can create a paper wallet right away by visiting the following link.
Phase 1.1 – Locate your wallet address
If you have made up your mind and chosen an option fit for you, you will have to find the wallet address located on your XMR-supported wallet. To make sure you have the right address, check if it starts with a 4. Monero addresses are larger compared to others, here is an example:
Phase 2 – Buy XMR through an exchange
Purchasing XMR can be done either through a local crypto ATM or a range of exchanges, such as Huobi, HitBTC, and Kraken. We will use Binance as an example due to their significant influence in the industry and several security measures.
As XMR lacks a fiat pair on reputable exchanges, you will have to deposit either Bitcoin or Ether. We recommend that you first check whether Binance provides its services to your country, as there is a list of nations that are banned from the platform. The process of registering is fairly easy, and if you desire to purchase a larger amount, you can verify your account by sending the required identification documents.
Binance offers the option to purchase both BTC and ETH via a credit card. The payment system is simple and accepts both MasterCard and Visa. The fee for depositing funds has a fixed rate of 3.5% per transaction. After waiting between 10 and 30 minutes, your purchase will be completed.
On the official site’s main page, click on ‘Exchange’ and select either the ‘Basic’ or ‘Advanced’ user interface. Upon entering the exchange, locate the search bar to the right and search for XMR/BTC, XMR/ETH, or XMR/USDT.
Select the trading pair you want and buy XMR either through a limit order or a market order. If you wish to buy XMR at the current price, select the amount you want and click on ‘Buy XMR’.
In the case that you want to buy the asset at a better price, set the desired price in BTC, add the amount of XMR you want to buy and click ‘Buy XMR’. After a certain time, your order will be filled and you will be able to withdraw XMR to your personal wallet.
Phase 3 – Transfer XMR to your personal wallet
You have successfully bought your first XMR coins! To own the assets without having it guarded by a third-party platform, you can withdraw your assets on Binance and transfer them to your personal wallet. If you plan on actively trading XMR, we recommend that you keep it on the exchange.
Head over to the section for withdrawing funds and paste your wallets address. Make sure to check the address a few times so that you don’t send your assets to the wrong one. After completing the transfer, you will see the amount of XMR you bought on your personal wallet.
How does Monero work?
Created in April 2014 under the name of BitMonero, the project is established as a privacy-oriented cryptocurrency that implements various mechanisms for hiding transactions. Privacy is essential in the cryptocurrency sector as all transactions can be tracked down to the wallet holder, and perhaps even to the individual that created the wallet.
The roots of Monero derive from a proof-of-concept currency named CryptoNote. It was initially made by a group of individuals from different backgrounds. The creator of CryptoNote’s whitepaper is Nicolas Van Saberhagen, who published it under a pseudonym in 2013. The project introduced the idea of creating one-time addresses to spoof the identity of wallet holders.
Monero upgraded the concept by adding more cryptographic tools that would significantly improve privacy. While several regulators view Monero as an asset that provides criminals with the tool to anonymously engage in illegal acts, the crypto community sees it as a valuable project for protecting the average user.
According to the developers, Monero is so secure in hiding crypto-holders that there is no possible way to accidentally send a transparent transaction. The project differentiates itself from other privacy-oriented projects by using the following three technologies:
- Stealth addresses
- Ring signatures
- Ring confidential transactions (known as RingCT)
To protect users, going past traditional measures that offer anonymity, the Monero team developed a few cryptographic security mechanisms. The goal is to reach a state where users have control over their private keys and can anonymously use the blockchain network.
When we take a look at Bitcoin, with enough dedication and knowledge, hackers can track down wallet-holders and eventually find out who they are. Transactions on the Bitcoin blockchain are transparent, offering a vulnerability in the case that the user does not protect his identity by using different services or by hiding behind a proxy. Hackers can go as far as to track the IP of the device on which you made a transaction.
To prevent such cases, Monero implemented the following technologies:
Stealth addresses allow users to create a public key that will be used one time only. By only generating it once, the person on the receiving side of the transaction can hide the assets located on his wallet. If the sender decides to share his public key, a 3rd party can process it and confirm the transaction.
Likewise, the receiver creates a one-time private key after his wallet has scanned the blockchain network and detected the transaction. After confirming the transaction, the receiver can use his generated private key to spend his new assets without publicly revealing any information.
By integrating ring signatures, a single transaction can be signed by multiple users. By doing so, individuals who read the transactional data cannot tell who is the real person that sent the transaction.
When creating a transaction, the original sender generates a key that will only be used once. The user on the other side will be the only person that can see the key and spend the amount of money sent via the transaction.
Ring Confidential Transactions (RingCT)
Also known as a ‘commit’ in cryptography, RingCT is a feature where senders can disclose the minimal information needed for miners to confirm a transaction, to the point that you cannot even see the amount of money that Is sent. By implementing this feature, Monero holders can reveal the least amount of information possible, protecting their valuable privacy.
Final Word – Should you invest in Monero?
Monero is certainly an interesting and unique project and the same can be said for the cryptocurrency’s fate. While some hold the view that the US Securities and Exchange Commission may ban it at one point, the Monero community thinks that the price will drastically increase as anonymity becomes critical for the sector. While there are other privacy-oriented coins, they are nowhere as cryptographically secure as Monero.
Monero is praised for the following points:
- Most-active developer community in the entire crypto sector
- Possesses several security mechanisms for anonymity
- Almost impossible to track identities
- One of the oldest crypto projects
However, investing in cryptocurrencies is never safe. No one can truly predict how a project may end up no matter his technical expertise. As always, we recommend that you don’t follow financial advice and that you do your own research. Learn more about Monero by checking out their community, whitepaper, and other literature that may help you with your decision.