XMR: Anonymous “Bank” Account

Possessing Monero with a proper crypto wallet is the modern version of being a holder of a Swiss numbered bank account of the old, but with far more privacy, security and convenience. With Bitcoin BTC you can send and receive funds peer-to-peer to anyone in the world without a third party.

These transactions are processed seemingly instantly, are immutable and trustless. This is done through a cryptocurrency wallet (app) with a smartphone or computer, like any other banking app of ordinary banks.

Sending funds is as basic as sending an email and receiving is as effortless as receiving a text message. It’s faster, easier and cheaper than making transactions with a traditional bank / banking app. Wealth is securely preserved like a savings account without the risk of censorship; freezing, seizure etc.

The obvious downside is you can’t move fiat (USD, Euro etc.) with a crypto wallet, but that’s the point of cryptocurrency, to rely less on traditional finance.

With Monero XMR the same is possible with the added benefit of complete user anonymity, transaction details invisibility and hidden wallet balances with historically 100 percent effectiveness. Nothing and no one can be tracked or traced (when following the very basic security measures).

        Bitcoin VS Monero

Bitcoin is pseudonymous and is an open ledger. This means that most users can potentially be identified and the details of every single transaction is available to the public as well as every user’s wallet balance.

The creator of Bitcoin, Satoshi Nakamoto, intended it to be “digital cash”. However, it is currently better (if not perfect and similar to gold) as a store of value (at least as a layer 1). This is because of the non private and open ledger nature of Bitcoin makes each BTC unit and subunit (Sats) technically non-fungible, unlike gold or cash.

That means every single Bitcoin has a history attached to it of every transaction and previous owner, of which can be viewed by anyone. With a bar of gold or a hundred dollar bill, there’s none of that, Monero is the same. Hence, XMR is digital cash.

        The Crypto Wallet

The crypto “wallet” is the de facto mobile banking app. I use Cake Wallet (iOS, Android), in my experience it’s the best hot wallet for XMR as it’s designed specifically for it, taking advantage of its tech and features for the user. The code is open source, you can choose custom nodes and also works with Bitcoin and Haven XHV with in-app exchanging.

This will be not just your “bank account” but “bank” as well. Meaning your money (XMR) will be stored in it like a vault but will be easily accessible (to you) like a banking app or an actual physical wallet.

Funds can be deposited into it in the same way, by transferring it as a regular transaction; sending it from another wallet to this one or by withdrawing to it from an exchange. The funds in this wallet is self-custody, unlike your regular banking app. Meaning you are in complete possession and control of it.

        Acquiring Monero XMR

Getting / trading Monero is not as easy as buying Bitcoin or Ethereum as it’s not as widely available throughout cryptocurrency exchanges, especially to acquire it anonymously without KYC regulations, credit / debit cards or traditional bank accounts.

The most cost-effective way is with KuCoin. They are a highly liquid exchange that doesn’t require KYC, have extremely cheap transaction / withdrawal fees and a killer mobile app (although it may be overwhelming to the novice). After purchasing XMR, withdrawal it to your wallet.

The easiest way is by swapping out some of your existing crypto for XMR. I prefer changeNOW for their low fees, reliability and also for not requiring KYC. The process is simple. Use the form, get a quote then send them the relevant crypto to swap, minutes later you receive XMR into your wallet.

An advanced method of buying and selling Monero through a peer-to-peer exchange is with LocalMonero. It also doesn’t require KYC and offers many different payment methods rarely available with crypto exchanges.

There are other methods of acquiring XMR anonymously such as mining, atomic swapping and getting paid in it, as RDCTD Site does for memberships.

        Transacting With XMR

As with a Swiss numbered bank account, it’s not something you’ll use everyday (at least not yet). Monero needs more adoption before it can be used as much as a traditional checking account / debit card. This will take time but in the meantime it’s already an exceptional medium of exchange; being able to spend it like cash, anonymously and independently.

Sending XMR is the same as BTC; copy and paste or scan the QR code of the receiving Monero wallet address, type in the value amount, then click “send”. The recipient will see it hit their wallet in less than a minute and it will be confirmed in about 2 minutes. The sender pays the transaction fee which is usually a fraction of a cent to a few cents, regardless if you’re sending $1, $100 or $100,000,000 worth of XMR.

Within the wallet you can generate unlimited receiving addresses to further anonymize your finances, although it’s overkill for most users since Monero by default is already incredibly private. For example, I have many addresses (which can be neatly organized in the app) specifically for certain types of transactions. One is labeled “Mining” to receive funds only from my solo mining rig that mines XMR. Others labeled “KuCoin” and “changeNOW” to receive only XMR from those exchanges and so on.

Bitcoin’s method is to generate a new address after each deposit. It certainly obfuscates user data but it’s still traceable and connected to the origin wallet. With Monero, every address is like a black hole that sucks in data (sender / receiver details and the amount of XMR sent) and hides it forever to everyone except for the sender and receiver of each individual transaction.

So it has one of Bitcoin’s most important features; to be able to verify without a doubt that a transaction is authentic and have been processed – without needing a third party to authenticate or requiring trust from either party. Monero does this without needing to expose who-sent-what-to-who to an open ledger.

If someone knows your Bitcoin address, they can see every single transaction you ever made including for how much and with whom by using the BTC block explorer. Even if someone knows your Monero address and looks it up in the XMR block explorer, they won’t find anything of any use.

        Saving With XMR

Because of Bitcoin’s unique properties, it makes it the world’s next great store of value; “gold 2.0”. Monero shares many of the same properties and being one of the oldest cryptocurrencies, therefore thoroughly time-tested and battle-hardened. Their value has been proven extremely profitable and each network has held up against attacks superbly.

While Monero doesn’t have a fixed supply like Bitcoin, it was brilliantly coded with tail emissions which makes it one of the least minted (supply) coins giving it currently 1 percent inflation of which will increase to 0 slowly over time. Whereas Bitcoin’s inflation rate is currently and will be around 1.79 percent for the foreseeable future.

In contrast, the US Dollar suffers from 7.9 percent inflation making it a horrible store of value as your purchasing power every year is reduced by as much with no chance of its value increasing. Whereas Monero and Bitcoin can’t be debased but in fact their value has historically increased – each far more than the price of gold by many thousands of times over.

Storing your wealth in Bitcoin and Monero has no counterparty, bank run and fractional reserve risk. That’s because you totally and irrevocably own your money; it’s in your literal possession and you have complete control over it. Having your money at a traditional bank does offer not these properties.

Because of Bitcoin’s absolute scarcity, significantly more liquidity and superior network effect, it makes it a better store of value but Monero has an edge: bulletproof privacy. As previously mentioned, every BTC address / wallet is open to public view, meaning if someone knows your’s, they know exactly how much wealth you have and how you spend it.

Your XMR balance and transactions are only known to you, no exceptions, even if an address is known.

        Exchanging With XMR

Monero is one of the oldest and most used cryptocurrencies in the world but this asset class is still new relative to fiat and gold. So it is far from widely accepted and far behind Bitcoin’s level of global acceptance. It’s still very early.

What do you do if you land in a foreign country and your US dollars aren’t accepted? You exchange it to something that is.

With Monero and Cake Wallet, currency conversions can be done within the wallet with just a few clicks and settles with finality in your account (crypto wallet) in a few minutes.

So if the need arises, you can convert your XMR to Bitcoin, Ethereum, stable coins and many other crypto assets with minimal effort, negligible fees and without KYC. Converting from XMR into another crypto will also retain that new asset with anonymity.

Exchanging any cryptocurrency to Monero XMR is essentially the same thing, of which will break the traceability of its prior asset and any identifying data.

To “cash out” your Monero, you can sell it for fiat anonymously, LocalMonero is the best option. It’s a peer-to-peer exchange specializing in XMR.

An easier but not anonymous way is with a regulated crypto exchange such as Gemini or Coinbase with completed KYC. Here you can withdrawal the funds to your traditional bank after selling your XMR.

        Getting Paid in XMR

A very powerful use case of XMR is to get paid from anyone from anywhere without a third party involved and with no traceable record or identifiable data attached to it. It’s permissionless, sends nearly instantly and is “cash final” within minutes.

This is particularly useful if you or your clients require absolute anonymity and operational security. I accept XMR as payment for my consulting service and this site primarily takes it for membership fees.

All standard payment processors like PayPal and Stripe requires a certain level of KYC, have high fees, and are susceptible to censorship, fraud and chargebacks. Monero fixes this. There is no KYC whatsoever, fees are often less than a cent, transactions can not be in anyway be manipulated or stopped, fraud is a non-issue as that’s not a possible attack vector and all transactions are immutable.

        XMR as Your Private Bank

For the average individual, Monero will not replace a traditional bank, we are years away from that. But it can be strategically used for flexible and dynamic financial processes never available before. It can greatly enhance the self sovereign way of life while maximizing personal privacy and security.

As for others, Monero with the addition of Bitcoin and sometimes stable coins, XMR can indeed be used as their primary “bank account”. Most necessary things in life can be purchased with Monero and Bitcoin if you know where to look. This also has the added benefit of capital appreciation and inflation resistance.

And of course, to have your money and how you spend it only known to you as it should be with the total protection of your wealth from outside forces.