Bitcoin is the most popular cryptocurrency for investors, with a market cap larger than the next 10 biggest crypto tokens combined. But are there better and more popular options for daily transactions? After all, using the Bitcoin blockchain does have many downsides, including cost and privacy.
Here, we’ll look at how transactions with another popular cryptocurrency, Monero, compare with Bitcoin. We will find out why many crypto users prefer Monero for their day-to-day use on the Godex exchange or other platforms.
BTC vs Monero for Daily Use
The Monero blockchain project was founded over 5 years after Bitcoin. Its designers wanted to make a token that differed from Bitcoin in important areas such as privacy and fungibility. Let’s compare those differences for daily use.
The block time of Monero is just 2 minutes, much shorter than Bitcoin’s 10 minutes. But, Monero transactions still take longer than Bitcoin transactions. The reason is that Monero was built as a privacy-first crypto token. As a consequence, its consensus algorithm is more complex than Bitcoin, using zero-knowledge proof and ring signatures. These techniques are designed to protect the identity of transacting accounts by obfuscating transaction details.
It can take 20 minutes for a transaction to be fully processed using these technologies. This means Bitcoin transactions are faster to settle by up to 10 minutes.
The biggest downside of using Bitcoin for daily crypto transactions is its sky-high transaction fees. In 2022, the average Bitcoin transaction fees are ranging from $1 to $3 for a single transaction, but can be more than $5. This is caused by Bitcoin’s popularity and its low transaction throughput. This makes Bitcoin unfeasible for small daily transactions and means only Bitcoin transactions in the hundreds of dollars are worth the cost.
Monero transaction fees are orders of magnitude lower, currently sitting around $0.0009. This makes Monero perfect for any daily transactions, even online transactions of a few cents.
Monero’s core feature is its privacy. When transacting on the Monero network, there is no way for anyone to identify the sender or receiver’s address. You can transact with whomever you like, and you have almost no privacy risk.
This isn’t the case with Bitcoin. Everyone can see the full Bitcoin transaction history for all tokens on the Bitcoin blockchain. So, if someone can find out your Bitcoin address, they know your wallet balance transaction history. This is how we know that Satoshi Nakamoto, the creator of Bitcoin, owns around 5% of the Bitcoins in existence, and where they are stored.
Fungibility refers to the interchangeability of a token. Bitcoin does not have complete fungibility, as all Bitcoins can be distinguished by their transaction history on the blockchain. Certain Bitcoin addresses can be marked by authorities, and those Bitcoins become less valuable.
Monero has much higher fungibility through its use of zero-knowledge proof and “stealth addresses.” These allow transactions to be confirmed without implicitly storing the transactor’s details on the blockchain. So, Monero tokens do not carry details of their past and are impossible to distinguish from each other. This gives you more protection as a Monero user and is why many traders are swapping BTC to XMR.
Which One Should You Choose?
Bitcoin certainly has its advantages as an investment token. It’s the heart of the crypto market and will likely keep its place as the most secure crypto asset for a long time. But, its shortcomings in transaction costs, privacy, and token fungibility make it a poor choice for daily use. Monero has massively better performance in all of these areas. Using Monero, you can transact at an extremely low cost with zero privacy issues. This means you should keep your Bitcoin investments, but, where you can, use Monero for small, day-to-day crypto transactions.