Monero —— A Private, Secure, And Untraceable Cryptocurrency
- Monero (XMR) is a Proof-of-Work cryptocurrency, which started in 2014. Its focus is on privacy, security, and untraceability. Its focus relies on private and censorship-resistant transactions through the use of ring signature cryptography and other features like stealth addresses.
- Through the use of ring signature cryptography and other features like stealth addresses, Monero aims to make transactions both private and anonymous, hence solving some of the issues of large PoW cryptocurrencies like Bitcoin, such as lack of fungibility and transaction traceability.
- It also focuses on ASIC-resistance. Since December 2019, RandomX has replaced CryptoNote, deprecating the need for biannual upgrades.
- Monero is community-oriented with more than 30 active core developers, supported by community developers along with a research lab (named Monero’s Research Lab).
Monero (XMR) is a Proof-of-Work cryptocurrency, which started in 2014. It focuses on privacy, decentralization and scalability. Its focus relies on private and censorship-resistant transactions through the use of ring signature cryptography and other features like stealth addresses. Monero also focuses on ASIC-resistance. Since December 2019, RandomX has replaced CryptoNote, deprecating the need for biannual upgrades.
Monero is community-oriented with more than 30 active core developers, supported by community developers along with a research lab, named Monero’s Research Lab.
Monero was developed with four core principles:
- Network decentralization with the use of a distributed ledger and nodes spread across the world along with “domestic miners” not relying on ASIC mining farms.
- Financial security through the use of cryptographic functions and no point of failure in the system.
- Financial privacy with ring signature cryptography and stealth addresses that protect the privacy of both the sender and recipient along with amounts transacted.
- Fungibility i.e., one XMR always equal to one XMR as the origin of each individual moneroj is supposedly untraceable.
Seven developers were initially involved in creating Monero — five of whom decided to remain anonymous. The other two are Riccardo Spagni (today's main developer) and David Latapie. Riccardo Spagni is also called "Fluffypony".
XMR’s origins can be traced back to Bytecoin, a privacy-focused and decentralized cryptocurrency that was launched in 2012. Two years later, a member of the Bitcointalk forum — only known as thankful for today — forked BCN’s codebase, and Monero was born.
The Monero project is a massive community effort, collectively crafted by hundreds of individuals from all across the globe. Monero has adopted an un-governance scheme for organizing growth and development. The project is comprised of several different branches working together: the Monero Core Team, the Monero Research Lab, Monero Workgroups, and the community.
Monero base on the RandomX algorithm and relies on different privacy features such as Ring Confidential Transactions (RingCT) to prevent non-transacting parties from distinguishing between individual transactions, and stealth addresses to maintain the confidentiality of transacting parties.
Ring confidential transactions (RingCT)
Ring Confidential Transactions (RingCT) hide the amount of XMR being sent in a unique transaction.
Ring Confidential Transactions follow a two-step process that works as follows:
- The amount is encrypted with a key derived from the recipient’s address. This encrypted amount can only be decrypted by the recipient.
- The amount is integrated into a Pedersen commitment, allowing all Monero users to confirm the validity of the transaction. Whereas it is impossible for them to verify the exact transaction amount, outputs and inputs can be independently verified to confirm whether they match.
Stealth addresses can be interpreted as unique single-use addresses. One-time addresses are used by both the recipient and the sender. Stealth addresses are an important part of Monero's inherent privacy. They allow and require the sender to create random one-time addresses for every transaction on behalf of the recipient. The recipient can publish just one address, yet have all of his/her incoming payments go to unique addresses on the blockchain, where they cannot be linked back to either the recipient's published address or any other transactions' addresses. By using stealth addresses, only the sender and receiver can determine where a payment was sent.
Initially, the ASIC-resistant feature of the network owed itself to a modified version of CryptoNight (a PoW algorithm) that was frequently adjusted to prevent ASIC mining。
However, since December 2019, RandomX has replaced CryptoNight. Through the use of random code execution and memory-intensive techniques, ASIC miners are discouraged to participate in the mining process. In addition, GPUs have also been penalized since the network upgrade.
Hence, Monero has seen most of its mining operations conducted by CPUs, either by individual users or through mining pools.