What is Monero? Monero is one best security cryptocurrency right now. It is private and secure. This also means that it is untraceable.
When Bitcoin was first released, it solved the decentralized currency problem. People can now send bitcoins without relying on a centralized bank. However, it was limited in many ways. That’s why we say Bitcoin as the 1st generation blockchain. For example, it didn’t solve the problem of traceability. If you know someone’s bitcoin address, you can track their whole online transactions by using any of the bitcoin blockchain explorers.
What is Monero (XMR)?
To solve the same issues, Monero is released. Monero hides all the transaction details including sender, receiver and the amount that is transferred. This anonymity can help in making the blockchain a better place.
Monero is also open source, and anyone can contribute to the code. It also supports mining features which are used to power the network. The miners are rewarded for contributing to the network. The mining support ASICs powered chips.
In today’s article, we will explore Monero for more details. To get a better understanding, we will go through the points below.
- Monero Origins
- Monero Features
- How does it work?
So, without any delay, let’s get started.
Monero started its journey in 2018. It is built using CryptoNote, an application layer protocol. The protocol is used to fuel decentralized currencies. Monero is quite similar to Bitcoin, but it does differ in implementation. The work started with Bytecoin, but things didn’t pan out. Almost 80% of the coins were published. To solve the problem, the team decided to fork it and name it “Bitmonero.” It was later changed to Monero.
The team working behind contains seven core members, 48 developers, three community members, and three research lab members. Want to know more? Check out the Monero team page.
To get a better understanding of Monero, we need to go through its features one by one.
1. Complete control
With Monero, you are in complete control of your currency and transactions. Also, Monero is private which means no one knows what, when and how you receive your cryptocurrency.
That’s one of the most important features of Monero. Without fungibility, Monero might not be as effective as other cryptocurrencies. So, what does this mean? It means that it can be exchanged just like dollars. For example, if you borrow $100 from someone, you can return them $50 once and the rest at $25 or just $10 each time.
This means you can return with a dollar of different values without any issues. Monero is also fungible. It builds upon the drawbacks of the Bitcoin. Bitcoin users always have to be careful with the transactions. As can be tracked, it can lend you into problems. For example, if a user used it for illegal activities, and then later transferred some Bitcoin to you, the value might not remain the same. You may also catch unnecessary attention from authorities, killing the whole idea of anonymity and decentralization.
Monero does this well, and ensure that no one knows about your coin’s transaction history. That’s a huge feature!
Other key features that Monero supports are Dynamic Scalability, ASIC compatibility, Multiple Keys and so on.
How Does Privacy Works in Monero?
The most significant advantage of using Monero is its privacy feature. To achieve it, it uses ring signatures and stealth addresses. Let’s try to understand them below.
Ring Signatures: Ring signature is used to ensure that the sender information is not revealed. To make it work, the sender identity is mixed within a group. Once the digital signature is generated from one random user of the group, it becomes usable. This ensures that the identity of the user who signed is not revealed.
Now, the ring signature is combined with the sender’s account keys. Now, they are again mixed with the public key, making it unique. By doing all of this, the sender’s identity is kept private.
Stealth addresses: Just like the sender, the receiver identity also needs to be protected. It is done with the help of stealth addresses. It protects both the sender and receiver address.
According to the market cap, Monero is currently 12th in the market cap. It has grown strongly in the past few years and it does look strong. So, what do you think about Monero? Comment below and let us know.