Bitcoin (BTC) popularised decentralised public ledgers (called ‘blockchains’) and the notion of cryptocurrencies, a modern decentralised finance (DeFi) movement. Satoshi Nakamoto’s vision was undoubtedly revolutionary, yet Bitcoin supporters quibbled with some specifics from the beginning, even as they appreciated what it was attempting to accomplish.
Monero (XMR) was created as a more private alternative to Bitcoin, protecting user information by obfuscating the source of transferred funds, how much was sent, and where the money went. Monero developers have innovated multiple privacy features since launch, some of which have been adopted by other altcoins. Let’s take a closer look at how BTC and XMR differ in their features and tokenomics.
Key Differences Between BTC and XMR
Bitcoin Overview
Bitcoin is a peer-to-peer (P2P) digital currency that led the way in facilitating electronic transactions without relying on banks or governments. Nakamoto first described Bitcoin in a 2008 white paper and created the first coin — and new crypto industry — on 3 January 2009. Nakamoto was heavily involved in Bitcoin early on, but ultimately stepped back in favour of the Bitcoin Foundation and its lead developer, Gavin Andresen. Today, Bitcoin is governed by a decentralised community.
Bitcoin’s many innovations include a distributed ledger for immutably storing transactions, the Proof of Work (PoW) consensus mechanism, and open-source code allowing for countless developers to contribute to the network. As the oldest cryptocurrency, Bitcoin has also served as a Proof of Concept by establishing virtual money as valuable, as well as introducing the ‘blockchain trilemma’ of decentralisation, security, and scalability.
Bitcoin’s protocol has been amended to address these concerns. In August 2017, Segregated Witness (SegWit) was activated to improve scalability through Layer-2 blockchains like the Lightning Network. In November 2021, Taproot was implemented to enhance the functionality of the Lightning Network and smart contracts.
Monero was created to solve three perceived issues inherent to Bitcoin’s protocol: traceability, mining centralisation, and irregular coin issuance. The project began as BitMonero, an early attempt to combine Bitcoin’s structure with Monero’s core focus on anonymity.
However, disagreements within the community over its direction led to a fork in April 2014, creating Monero as we know it today. Development was led by an anonymous group spearheaded by Fluffypony (later identified as Riccardo Spagni), who served as the face of the project before stepping away in 2019 to promote decentralisation.
Monero’s focal point has always been privacy, which prevents potential price discrimination by concealing financial information, allowing individuals to save and transact freely. Monero’s features have attracted a variety of users who value privacy, including criminal interests that made it a popular darknet currency while negatively affecting public perception. But the use cases can extend to a multitude of legitimate purposes, such as anonymous donations to charity or the ability for whistleblowers to share sensitive information without giving up their identity.
Monero’s privacy ecosystem utilises a combination of advanced cryptographic features that work together to ensure transactional anonymity. ‘Stealth Addresses’ generate unique, one-time-use addresses for recipients, preventing transactions from being linked to their actual wallets. ‘Ring signatures’, added in 2017 as part of the ‘Ring Confidential Transactions’ (RingCT) upgrade, blend the sender’s signature with decoys drawn from the blockchain, making it impossible to determine the true sender.
RingCT also expands security by concealing transaction amounts, ensuring that only the sender and recipient know how much is being transferred. In 2018, Monero added ‘bulletproofs’, a Zero-Knowledge (ZK) proof method that cut transaction sizes by more than 80% to enhance efficiency. Additionally, the ‘Dandelion++’ protocol launched in 2020, protecting the origin IP address of the transaction by routing it through a series of nodes before broadcasting it publicly.
Bitcoin is the first cryptocurrency to use a PoW consensus mechanism, where new transactions must be included in a block with a mathematical proof of work. These proofs are challenging, as miners compete to find the proper solution to the mathematical problem first in order to claim a set block reward (plus associated transaction fees). The only way for miners to arrive at the solution is through trial and error, forcing them to use powerful computers to crunch the numbers. The block reward changes every four years in an event called Bitcoin halving.
Monero also uses a PoW consensus mechanism, but the underlying algorithm differs. Bitcoin’s SHA-256 algorithm is easy for Application-Specific Integrated Circuit (ASIC) mining rigs to crack, centralising mining around large firms with dedicated setups. Solving Bitcoin’s mining centralisation was always a priority with Monero, and it tried several hashing algorithms before landing on RandomX in 2019, a memory-intensive algorithm optimised for central processing units (CPUs) that allows normal computers to mine XMR, increasing accessibility to consumer-level mining.
However, Monero’s mining decentralisation vision still faces several challenges. While RandomX reduces reliance on ASICs, mining pools have consolidated a significant portion of Monero’s hashing power. These pools allow individual miners to combine their computational resources and share rewards, but they also concentrate control over block validation. Having a small number of pools controlling a majority of Monero’s network hashrate draws similarities to Bitcoin’s mining pool dynamics and introduces potential vulnerabilities.
Bitcoin and Monero’s Scalability
PoW blockchain protocols aren’t as scalable as Proof of Stake (PoS) networks, leading to slower processing times and higher transaction fees. Bitcoin processes about seven transactions per second (tps), which is slow for everyday exchange. Monero can reach about 90 tps in real-world conditions, but this varies significantly due to its dynamic block size and the complexity of its privacy features.
While dynamic block sizes allow for higher transactions per second during network congestion, they often come at the cost of higher fees and processing times, putting Monero’s scalability at the mercy of network conditions and node performance. Overall, the scalability of both BTC and XMR pale in comparison to PoS networks like Avalanche (AVAX) and large payment processors like Visa.
Feature
Monero (XMR)
Bitcoin (BTC)
Year of Creation
2014
2009
Purpose
Digital currency and store of value
Conducting censorship-resistant transactions
Consensus Mechanism
Proof of Work (PoW)
Proof of Work (PoW)
Transaction Speed
~90 transactions per second
~7 transactions per second
Supply Limit
Capped at 18.4 million XMR
Capped at 21 million BTC
Block Time
~2 minutes per block
~10 minutes per block
Development Approach
Maintains egalitarian mining so that everyone can have the possibility to mine
Allows for neutrality towards developers, users, and miners
Technology Base
Blockchain
Blockchain
Native Cryptocurrency
XMR
BTC
Popularity
The most private token on the market
The first and most well-known cryptocurrency
Global Reach
Worldwide user base, diverse applications
Worldwide user base, diverse applications
Tokenomics Comparison
Bitcoin Use Cases
BTC, known as a digital value store and used for transaction fees and miner compensation, is the native token of the world’s most established blockchain network. Holders can swap it for nearly any other cryptocurrency or fiat currency on trustworthy platforms like Crypto.com. Bitcoin is also part of exchange-traded funds (ETFs), providing exposure to other classes of traders and widening its market reach.
Acceptance as a Payment Method
Bitcoin is the most well-known cryptocurrency, and many merchants accept it for crypto payments. Major retailers accepting BTC payments include NewEgg, The Home Depot, and Whole Foods Market. Smaller retailers, such as Bloom Audio, Drones Elite, and Shiny Leaf Skincare, also accept BTC to differentiate themselves from competitors. Bitcoin is also exchangeable for gift cards through multiple services.
Monero Use Cases
XMR is the native token of Monero’s network, utilised for transaction fees and miner compensation. It is also a digital value store, though some exchanges don’t support it due to its reputation as the crypto of choice for criminal activity. Still, holders can exchange it for other tokens or fiat currency on trustworthy platforms, including Crypto.com.
Acceptance as a Payment Method
Companies accepting Monero payments include the travel booking platform Travala, website hosting service HostMeNow, and AUGET. XMR holders can also buy gift cards to popular retailers.
Key Pricing Moments
Cryptocurrencies are known for price volatility, and both BTC and XMR have large swings in their price histories. Below is a brief timeline for each one.
Bitcoin — Key Price Events
July 2010
BTC is offered to the public for the first time. Prices range from US$0.0008–0.08.
2013
BTC sees its first major price spike, gaining 6,600% after Chinese traders use it to get around China’s capital control efforts.
21 February 2014
BTC loses 90% of its value from early January after popular cryptocurrency exchange Mt. Gox declares bankruptcy after hackers stole 744,440 BTC deposited by customers.
2020
BTC nearly reaches $29,000 due to concerns about the global economy during the COVID-19 pandemic, representing over a 400% increase. BTC’s value continued to increase through the 2021 bull crypto market.
22 November 2024
BTC reaches a new all-time high (ATH) of $99,373.96 after Donald Trump wins the United States Presidential election, with traders anticipating Trump will embrace crypto through favourable regulations.
17 December 2024–20 January 2025
BTC hits two ATHs on the strength of speculation for a BTC strategic reserve, peaking above $109,000 on 20 January 2025, Trump’s inauguration day.
Monero — Key Price Events
2014
XMR hits the market at $1.65.
August 2017
XMR reaches a market capitalisation of $1 billion for the first time.
January 2018
XMR sheds 60% of its value following the publication of an academic paper titled “An Empirical Analysis of Traceability in the Monero Blockchain.” The paper argues that information on Monero’s blockchain isn’t as opaque as initially believed, compromising its privacy.
May 2021
XMR rides a crypto bull market to its ATH of $514.69.
6 February 2024
XMR loses 30% of its value after exchanges announce plans to delist the token amid regulatory concerns. Monero’s emphasis on privacy makes it a frequent regulator target, forcing exchanges to decide whether or not to support it.
Performance and Market Metrics
Bitcoin is the No. 1 cryptocurrency by nearly any metric, with a market cap of over $2.05 trillion and value in the $100,000 range per token (at the time of writing). Scarcity is the biggest driver of Bitcoin’s value — only 21 million BTC can exist, ensuring supply cannot match demand. It is an anti-inflationary mechanism, and BTC is frequently compared to gold as a value store.
Monero has a market cap at approximately $4.1 billion (as of this writing), and doesn’t have a capped supply. Its circulating supply of 18.45 million XMR is lower than Bitcoin’s nearly 20 million BTC, and its fixed token issuance of 0.6 XMR per block doesn’t flood the market. XMR has less than 1% inflation. Its value hovers in the $190–$230 range (as of this writing), with price upside potential due to its scarcity.
Developments and Roadmaps: BTC and XMR
Bitcoin’s Roadmap
A decentralised community governs Bitcoin, so a group has to reach a consensus before any upgrades are made. This often proves challenging, as altcoins like Bitcoin Cash (BCH) were created by disagreements. Bitcoin developers typically prefer to work on the periphery of Bitcoin’s network, making improvements to Layer-2s like the Lightning Network more likely than any fundamental change to Bitcoin’s original blockchain.
Bitcoin’s Community
Cryptocurrencies derive their value purely from supply and demand, and social media engagement can be a great way to gauge interest in a token. Bitcoin has over 7 million X followers and over 7.7 million Reddit followers (as of this writing), indicating an extremely large and passionate following.
Monero’s Roadmap
Monero is a decentralised blockchain project, but the Core Team that created it provides oversight and direction. Monero’s roadmap incorporates several upgrades, including an ‘Optimal Static Parametric Estimation of Arbitrary Distributions’ (OSPEAD) to enhance the network’s decoy selection algorithm, as well as a modern Monero node using the Rust programming language called Cuprate. Neither had a set timeline for implementation at the time of writing.
Monero’s Community
Monero has over 503,000 X followers and 338,000 Reddit followers as of this writing, indicating a relatively small but passionate following. Monero’s status as a privacy token may adversely affect its public community, since users want to remain anonymous and not connect with others.
Conclusion: Bitcoin vs Monero
Comparing BTC and XMR is challenging, as both are trying to accomplish different things. Bitcoin proved that cryptocurrencies could work and now serves as a trustworthy digital value store. Monero protects user privacy above all else, pioneering exciting features like RingCT and ZK proofs, while earning an unsavoury reputation for its darknet popularity.
Merchants favour Bitcoin for its brand recognition and high liquidity, but Monero’s relative price stability may also appeal. Speculators favour Bitcoin’s high price upside potential but might prefer Monero when privacy is paramount.
Always research a token’s price history, roadmap, capabilities, and tokenomics before considering a purchase.
Due Diligence and Do Your Own Research
All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.
Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.
Bitcoin vs Monero: Comparing Two Well-Established PoW Protocols
Discover the differences between Bitcoin (BTC) and Monero (XMR), two Proof of Work (PoW) cryptocurrencies with unique goals.
Key Takeaways
Bitcoin (BTC) was the first cryptocurrency, designed as a decentralised digital currency and store of value.
Monero (XMR) is a privacy-focused cryptocurrency aimed at protecting user transaction details.
Both BTC and XMR use Proof of Work (PoW), but Monero’s RandomX algorithm prioritises decentralisation by enabling CPU mining, unlike Bitcoin’s ASIC-dominated SHA-256.
Bitcoin transactions are publicly visible on its blockchain, providing transparency but limiting privacy, while Monero obscures sender, receiver, and transaction amounts through advanced privacy features like ring signatures, stealth addresses, and bulletproofs.
Bitcoin processes about seven transactions per second (tps), which is insufficient for everyday use without Layer-2 solutions like the Lightning Network.
Monero achieves around 90 tps, making it faster than Bitcoin but still slower than many Proof of Stake (PoS) networks.
Bitcoin has a capped supply of 21 million BTC, driving its scarcity and value as a digital gold-like asset; Monero has no maximum supply, but maintains low inflation through fixed token issuance, ensuring steady value.
Bitcoin is widely accepted by merchants and financial institutions, with extensive liquidity and brand recognition, and Monero’s privacy features make it popular for users valuing confidentiality but limit its acceptance due to regulatory concerns.