Monero operates as a peer-to-peer currency, with its primary advantage being privacy. While most cryptocurrencies, e.g., Bitcoin, have transparent transactions on their blockchain, Monero goes a step further. It's impossible to associate a transaction with a specific user in Monero. This is because every coin is "fungible," meaning all coins are interchangeable and indistinguishable from one another. This feature of Monero might be seen as controversial since some financial authorities could struggle with overseeing the transactions.
How Monero works
Monero differs from other cryptocurrencies in the way it achieves its privacy. It utilizes two primary cryptographic elements: stealth addresses and ring signatures.
- Stealth addresses: Allow the sender to generate one-time public addresses for each transaction, making tracking challenging.
- Ring signatures: The method through which Monero conceals the actual source of funds in a transaction. Every transaction is signed with a private key, but ring signatures make it nearly impossible to determine which key was actually used. In 2017, Monero introduced another layer of privacy with Ring Confidential Transactions, which hide the value of the transaction.
Monero's origins date back to 2012 with the release of the CryptoNote whitepaper. Bytecoin, the first cryptocurrency based on the CryptoNote protocol, was launched in 2012, and two years later, Monero was created.
The team behind Monero is mostly anonymous. Riccardo Spagni, also known as FluffyPony, was one of the few public faces of the project until 2019. Monero is fully funded by the community through the Community Crowdfunding System (CCS).
Monero undergoes updates every six months, in contrast to Bitcoin, which adopts a more conservative approach to updates. In 2018, Monero started using the "bulletproofs" technology, leading to a significant improvement in transaction efficiency. A major advantage was also the substantial reduction in fees for the end-user.
While many privacy-focused cryptocurrencies exist, Monero stands out due to its market capitalization and the fact that privacy is offered by default, where often this feature must be manually configured.
Value of Monero
Monero is considered one of the safest cryptocurrencies for those seeking privacy. XMR coins cannot be traced, making them an ideal solution for those wanting to evade prying eyes. However, this also means it could become a target for governmental regulatory bodies.
Monero is at the forefront of privacy technology in the crypto world. Although privacy can present challenges in terms of regulation, for many users, transaction confidentiality is paramount. Monero remains an invaluable alternative in an environment where transparency is often the standard.
We consider Monero, due to the aforementioned qualities, to be one of the most trustworthy cryptocurrencies, right after Bitcoin. Because of its history, we also believe that this digital currency will be used in the long term, which is why mining it makes sense to us.