Blog

Monero ELI5

Monero is digital cash. It’s like Bitcoin, but your activity is kept confidential.

Everyone stores their funds using a software application called a Monero wallet. Each wallet has its own receiving address. You tell other people this address so that they can send you funds.

When someone sends you funds, you can’t tell who sent it to you (unless they want you to know). Similarly, when you send funds, the recipient won’t know it was you that sent it, unless you tell them it was you. Because the movements of funds are kept private, no one can tell how rich anyone else is.

This is very different from Bitcoin, where everyone’s wealth and the people they’ve transacted with are a matter of public record. Monero’s privacy is important to prevent others from knowing how rich you are and to prevent them from spying on how you spend your money. It also keeps your business transactions confidential from competitors. Since Monero is untraceable, you do not have to worry that any funds you receive are tainted by anything suspicious the previous owner did with them.

Monero has no central point of authority. When you send funds to someone, a worldwide network of computers will come to an agreement among themselves that ownership of the funds has passed from one anonymous person to another. This means Monero cannot be shut down by any one country or authority.

The network of worldwide computers that verify and agree that transactions have taken place are called miners. The reason they are called miners is that they are rewarded with a small amount of funds in exchange for the work they do to verify transactions. The shared global record of transactions is called the blockchain.

To get started with Monero, all you need to do is download the Monero wallet. Then buy some Monero using dollars, pounds or euros from an exchange. The funds will appear in your Monero wallet, and you will be able to send some of your funds to any other person's Monero wallet.

Source