-Monero has a main focus on privacy.
-It is a popular blockchain-based cryptocurrency.
-It has a lot of privacy-enhancing features that make it an improvement over Bitcoin.
-Monero is open-source.
Monero is a digital currency that can offer a higher anonymity level for its users and their transactions than Bitcoin. However, just like Bitcoin, it is a decentralized peer-to-peer cryptocurrency. Its main difference is in the fact that it is a lot more anonymity and privacy-oriented.
Monero is one of the most popular blockchain-based altcoins and has several privacy features that improve upon Bitcoin. It was created as a grassroots movement with no VC Funding and no pre-mine. Monero launched all the way back in April of 2014 as a fork of Bytecoin.
Now, if you are uninitiated, a fork can occur when an original cryptocurrency is split into two to create another version of it. This is made possible through the open-source formats that are present in many cryptocurrencies. Furthermore, many of these forks are made to resolve some of the flaws associated with the parent cryptocurrency and create a better alternative through it.
That being said, Monero’s popularity has been high due to the anonymous design it has. You see, all of the cryptocurrency users are given a public address, otherwise known as a key, that is unique to each user. Now, if we take a look at Bitcoin, the coins’ recipient has them transferred to his address that he has to divulge to the sender. Here, the sender can see exactly how many Bitcoins the recipient has once he knows the public address. Through the Bitcoin blockchain, all of the coins transferred this way are recorded and made completely public, leaving users without much privacy in the process.
Monero resolves this by simply not giving the sender a view of the recipient’s holdings, simple, right? Even though the sender knows the recipient’s public address, the Monero transactions are untraceable and unlinkable.
This means that any coins sent to the recipient are routed through an address randomly generated and only used for that specific address.
The Monero Ledger has the added benefit of not recording the sender’s stealth addresses and the recipient. The one-time created address recorded is not linked to either of the two parties’ actual addresses.
Anyone who decides to examine the Monero ledger would not track the addresses and individuals involved in any past, present, or even in any future transactions.
Origins of Monero
To truly analyze the history of Monero, we need to look at Bytecoin first. It was launched in 2012, and it was the first digital currency that was written with CryptoNote. That technology is now the backbone of the biggest privacy-oriented cryptocurrencies available to us. The privacy of CryptoNote coins is ensured by grouping public keys. This is done by combining several keys in a single transaction, making it impossible to discover who actually sent it.
Bytecoin, however, had issues with its initial distribution, and when it eventually launched, 80% of the coins that would ever be mined already existed. This being the case, seven developers forked the Bytecoin blockchain, and the new currency would become Bitmonero. This eventually got dubbed Monero for short. The fascinating part about all of this is that five out of the seven developers keep their identities a secret. The two that didn’t are Riccardo Spagni and David Latapie. Monero launched in April of 2014 as a fork of Bytecoin.
On the Flipside
- Monero is open-sourced and privacy-oriented.
- Its blockchain makes transaction detail and the amount of every transaction fully anonymous.
- Investors can even mine Monero through CPUs and do not need to pay for specialized hardware.
- The privacy features have made it a popular choice for usage on the dark web.
Monero takes advantage of ring signature and stealth addresses to obscure the identity of both the senders and the recipients. A ring signature is a type of digital structure that can be performed by any member or group of users that have a key. A message signed with a ring signature is endorsed by someone in a particular group of people. It is computationally infeasible to determine which of the group member’s keys was used to produce the signature. Stealth addresses allow and require the sender to create a random one-time address for every transaction on behalf of the recipient. It is essentially a privacy coin.
The recipient can then publish just one address and have all of their incoming payments go to the blockchain’s unique addresses. The ring signatures combine a mix of a user’s account keys with public keys obtained from Monero’s blockchain to create a ring of possible signers. The result of this is the fact that outside observers cannot link any signature to any user.
Through offering this kind of privacy, Monero offers fungibility, and this means that each unit of a currency has the possibility of becoming substituted with another.
Because the transaction history of individual Bitcoins is recorded on the blockchain, the coins that have been associated with certain events, including theft, could be disregarded by merchants and exchanges. Since Monero is obscure in nature, no two coins are distinguishable from one another. Every single coin is equal in the eyes of a merchant as a result. The vendor can accept cryptocurrency or not accept it based on its history when it comes to Bitcoin, but in Monero, that history is not known.
Monero (XMR) has had an increase in adoption since its release, and it is high in demand as a result.
To summarize, Monero or XMR uses ring signatures to mask randomly-generated authentication keys and, in turn, keep transactions secure. It also offers many trading pairs, which makes it easy to get into and out of. This, in turn, helps it maintain its high trading volumes.
The Future of Monero
Monero is the world’s 14th largest cryptocurrency at the time of writing, with a value of $209.99. It has a circulating supply of 17,855,259 XMR coins and a market cap of $3,748,046,976. Much of this popularity and value comes from the fact that people actually use Monero to purchase things. More specifically, much of its growth is owed to darknet user adoption, especially on websites such as Alphabay for private and untraceable payments.
Anonymity and intractability are some of the most important aspects of cryptocurrency because they contribute to the currency’s fungibility aspects. Monero’s ultra-capable currency makes blacklists an impossibility, leading to a greater trust in the currency and not in each coin’s transaction history, as previously discussed.
Monero stands out from other cryptocurrencies because it provides a high level of privacy. Many experts have speculated that this is the single feature that could sky-rocket this currency to the top spots as more and more people are becoming aware of the importance of privacy. Keep in mind that cryptocurrencies are highly volatile, which is the case with just about any cryptocurrency out there. It essentially means that it can increase or even decrease by large percentages in a span of just a day. This makes it a bit difficult to predict the long-term prices of cryptocurrencies, and this includes Monero.
Ever since Tesla (NASDAQ:TSLA) purchased Bitcoin, the community has been trying to communicate with Elon Musk to add XMR as the next Tesla Payment Option. Monero also plans for the second audit of Bulletproofs+ Code, a new construction of a zero-knowledge proof system that makes transactions faster, making it faster for network participants to verify them.
It is an improvement from the various forms of ring signatures that have been adopted by Monero that made the network bloated and slowed down the node synchronization. Zero-knowledge proofing is a core aspect of Monero, and this makes the transactions confidential and gives it an edge over competing platforms as a result. The code is permissively licensed, with developers hoping that it will eventually find the widespread adoption it deserves across other privacy-focused networks.
While you might be under the assumption that Monero is only active within the dark web community, it is also a popular option for many standard cryptocurrency users due to the high level of privacy It offers.
This will surely be the feature that people both now and in the future will find the most valuable. In our current era, just about every single app we use collects data and stores our information for third-party things such as advertising and analytics. This is definitely a step in the right direction, and we cannot see where Monero goes next in terms of adoption and price.