Bitcoin was the first decentralized currency ever to be introduced to the world. It provided seamless transaction on a distributed ledger, blockchain, carried out with complete transparency and no footprint. The role of the middleman was diminished in the process. Bitcoin also paved for other cryptocurrencies and subsequent blockchain startups. But none of them have been able to outshine it yet.
Even though there are a myriad of features that makes bitcoin a very valuable commodity, there are a number of shortcomings as well. The biggest one to data is its inability to scale well. If the network receives a thousand number of transactions at the same time, the network would become congested thereby reducing the throughput, as a limited number of transactions can be carried out at a time. The other big shortcoming that bitcoin has that it has to be mined using high speed computing machinery which costs thousands of dollars per unit. On top of that the electricity bills that these computing machinery generates can be excessive.
Owing to these reasons, the newer cryptocurrencies that are being introduced in the crypto space are being designed keeping in view the various shortcomings of Bitcoin. Specifically in Monero’s case it is block size as well as the computing speed involved.
Where bitcoin’s network gets ingested due to the presence of a large number of transactions, monero has a slight advantage. The size of a block is limited in bitcoin’s network. Moreover if the transaction speed has to be increased, then the transaction fee has to be increased as well. This increases the overall cost. In comparison to this, monero adjusts the block size if a large number of transaction have to be made.
The transparency which keeps the nodes in check on bitcoins network can have detrimental implications as well. Even though the network is protected by the encryption algorithm it can be breached. For example, if the credentials of a person’s wallet can be observed by a hacker or a criminal, it will be easier for them to know which ones to hack into. It could place their entire earning in a risk. This shortcoming is catered to in monero. Monero provides encryption that prevents other nodes on the network from learning about each other’s credentials.
The biggest advantage that monero provides over bitcoin is that, to mine it one does not need to invest in high speed computing machinery. It does not involve the usage of large amount of electricity. This is due to the fact that mining Bitcoin is only possible using the ASIC chips that costs thousands of dollars. The amount of investment required to open a mining farm is humongous. Comparatively, monero can be mined using a personal computer. The mining chips that are required to mine monero are GPU’s, which cost less, and do not require a large amount of investment.
Even with all these advantages, bitcoin remains the most popular cryptocurrency up to date. More invest in Bitcoin rather than something that is an improvement to the existing network. The high value of bitcoin, currently $8568, in markets is the reason that it attracts a number of investors and miners who continue to mine it even though transaction fees keep on increasing.