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*obligatory not financial advice*
What is Monero?
Monero, or XMR, is what most people believe Bitcoin is. Most people believe that Bitcoin transactions are private and untraceable, but this isn't true at all. Monero on the other hand is a cryptocurrency where all transactions actually are private and untraceable.
Why is privacy so important?
There is a difference between anonymity and privacy. With privacy nobody else knows what you bought with your money and who received it, with anonymity you don't care if anyone knows how the money was spent as long as nobody knows you where the one sending it.
Bitcoin offers anonymity to a degree but its anonymity is far from bullet proof and all transactions are visible to everyone with a blockchain explorer. Once somebody knows your address they can see all your purchases on the public blockchain. If you would get paid in Bitcoin then your boss would definitely know your address and if you borrow money from friend he will know it too, if you buy something embarrassing like a membership for an adult site then your boss and your friend would know that. You don't have to do something illegal with your money to be uncomfortable with other people knowing your spending habits. Even if you would send your BTC to a different address and use this address for such purchases it could still be easily traced back to your main address.
But a lack privacy is not only embarrassing or uncomfortable. If you would use BTC for everyday purchases the by observing the daily transactions of an address long enough anyone could figure out who you are, where you live, what you like, how much money you have and many more things. This data could be abused to exploit you. If your spending data makes it look like you could become addicted to gambling then casino owner could target you with advertisements or special offers to lure you in. Any currency that is used for normal purchases needs to have some level of privacy and most blockchains don't offer that.
How does Monero work?
Monero doesn't have a problem with people snooping thru your data because all transactions are absolutely private and untraceable. For every transaction that is taking place on the network, the blockchain will also create a dozen fake transactions and except of the sender and the receiver nobody will ever know which one is true. This privacy feature is not optional like with many other coins, privacy is the default setting for Monero.
Monero uses a proof of work consensus which means it can be mined. It is actually profitable to mine with a normal computer because the network is ASIC resisted which is good for its decentralization. The transactions are relatively cheap and fast compared to many other coins.
The future of XMR
Monero is the privacy king. There are many other cryptocurrencies that have some level of privacy but it’s usually not the default setting and there are often disadvantages. Dash, for example, has a private send feature but private transactions have higher network fees, and Zcash has shielded and transparent addresses but you often cannot even use the shielded version and can't send from a shielded address to a transparent one. Monero doesn't require anything special from its users to keep their transactions private. Monero will stay the best privacy coin for some time.
However, this can also be a disadvantage for XMR because regulators like to ban and restrict the use of privacy coins. The lack privacy will become a big issue if cryptocurrencies go mainstream and then it could be Moneros time to shine. I am bullish for XMR but only for the long run, most other cryptos would likely have taken off before it starts to gain importance.
