June 23, 2021

How to Invest in Monero

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Monero is a popular altcoin focused on ensuring private transactions. But it's not available everywhere. Read on to find out how to invest in Monero.

While many people think cryptocurrency is anonymous, the truth says otherwise. With KYC (know your customer) protocols, your identifying info is usually required to complete the purchase.[1]

Monero (XMR), on the other hand, is a cryptocurrency designed for privacy.

Whether you're looking to buy Monero as an investment or for private transactions, you have to know where to buy it first. In this guide, we'll take a look at some of the best ways to buy Monero.

What Is Monero?

Monero is a decentralized, open-source, CryptoNote-based cryptocurrency. It was created in 2014, originally forked from the codebase of Bytecoin.

With an emphasis on privacy, it claims to be both untraceable and unlinkable.

Monero, which aims to function like "electronic cash," is unique from other cryptocurrencies because transaction info (i.e., senders, recipients, and amounts) is kept private. (Keep in mind: it does record transactions in a public ledger.)

This transaction info is stored in users' Monero wallets, where they can view data regarding their own transactions, but no one else's.

How is Monero anonymous?
Monero achieves this level of privacy mainly through a pair of cryptographic technologies, called ring signatures. These ring signatures obscure the sender, and stealth addresses, to hide the recipient.

Monero users can opt for some transparency by sharing their view key with someone they choose. This enables others to view incoming transactions without the permission to spend the balance there.

A shareable public address also allows users to receive Monero from others, without identifying them on the blockchain.

Monero is also a truly fungible currency. Unlike U.S. dollars, which have a serial number that make them traceable if it were to be recorded, Monero has no individual identifiers. One coin is precisely the same as another.

Due to its potential for use in illicit activities, money laundering, and tax evasion, Monero has received regulatory pressure in several countries. The IRS Criminal Investigation Division sought contractors with the ability to tie transaction data to specific users in 2020[2], and it has been delisted by exchanges in South Korea and Australia.

How to Buy Monero

How you buy Monero may depend mostly on where you are, as different regulatory bodies treat it differently. In general, you'll need to open an account with a crypto exchange to purchase Monero.

One exchange option is Binance, which is available to investors in over 180 countries. With competitive fees, safety protocols, and a range of purchasing options including credit, debit, bank, and wire transfer, it's a strong choice for purchasing Monero outside the U.S.

Binance supports the following Monero trading pairs:

  • XMR/BTC
  • XMR/ETH
  • XMR/BNB
  • XMR/USDT
  • XMR/BUSD

Trading pairs are assets that can be traded for each other on a given exchange. If you plan to buy Monero on a particular exchange, make sure they allow you to trade your current asset for Monero.

Notably absent are any fiat currencies (USD, EUR, GBP, etc.), meaning you'll have to convert your currencies to one of the accepted cryptocurrencies or stablecoins before buying Monero on Binance.

What other exchanges support Monero?
At time of writing, there were over 150 cryptocurrencies completing transactions in Monero according to coingecko.com, an independent coin data aggregator.

The top 5 exchanges for Monero ordered by 24-hour trading volume were: Binance, VCC Exchange, OKEx, Bitcoin.com Exchange, and HitBTC.

How to Buy Monero in the U.S.

For users in the U.S., the popular San Francisco-based exchange Kraken supports trading of Monero in exchange for BTC, EUR, and USD in every state but New York.

Kraken users can deposit USD via Fedwire or SWIFT transfer. Verified residents in Canada can make deposits in person via cash or debit. First-time fiat deposits will result in a 72-hour withdrawal hold on the account.

At the time of writing, Kraken accounted for a little over 1% of Monero's trading volume, while Binance did almost 20%.

This lower volume may result in slippage on larger orders—that is, a difference between the expected trade price and the price at which it's actually executed. This may occur when there isn't enough volume to maintain the current bid/ask spread.

Read more: Kraken Review

How to Buy Monero with a Credit Card

There unfortunately aren't many ways to buy Monero directly with a credit card. But it is possible to buy Bitcoin on Binance with a credit card and exchange it for Monero—at least for traders outside the U.S.

Keep in mind that credit card purchases are typically pricier than bank transfers. At Binance, ACH transfers are free, while credit and debit card purchases incur a fee separate from the transaction fee.

How to Store Monero

While it is possible to leave your cryptocurrency on many exchanges, most experts and enthusiasts will advise you to keep your coins in a hardware wallet in your possession.

Exchanges like Binance and Kraken go to great lengths to protect users' assets. But if the history of cryptocurrency has taught us anything, it's that no exchange is guaranteed secure.

Thus, cold storage in hardware wallets like the Ledger Nano S and the Trezor One are considered the height of personal protection.

Bottom Line

Monero is a popular cryptocurrency for those seeking private transactions and has the potential for widespread adoption.

While it isn't available on every exchange, including some of the most mainstream, investors can find it on over a hundred exchanges around the world, including Binance, and on Kraken in the U.S.

Due to the contentious nature of its privacy-enhancing features, only time will tell whether the list of exchanges offering it will shrink or grow.

References

Jeremy Harshman is a protector of art and writing at CreditDonkey, a personal finance comparison and reviews website. Write to Jeremy Harshman at jeremy.harshman@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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