Monero (XMR) is an open-source, privacy-oriented cryptocurrency that is built and operates on the blockchain concept. These blockchains, which form the underlying technology behind digital currencies, are public ledgers of participants' activities that show all the transactions on the network.
Why was Monero created?
- Bytecoin, a digital currency was a good effort at an anonymous cryptocurrency. However, there were a few issues with its initial distribution. When it launched, it turned out that 80% of the coins that would ever be mined were already in existence.
- This led a group of seven developers to fork the Bytecoin blockchain and the new currency would be known as Bitmonero. This was eventually shortened to simply Monero which is Esperanto for “coin”.
Who created Monero?
Of the seven developers who originally created Monero, five of them decided that they would keep their identities secret. Only two of these Monero developers are known about – Riccardo Spagni (the main developer today) and David Latapie. Riccardo Spagni in April 2014.
Which Technology is used?
It is a digital currency that was written using a technology called CryptoNote.The use of these “ring signatures” to sign transactions provides the anonymity of the CryptoNote technology.
How does Monero work?
- Monero is digital cash. Everyone stores their funds using a software application called a Monero wallet. Each wallet has its own receiving address. You tell other people this address so that they can send you funds.
- Monero has no central point of authority. When you send funds to someone, a worldwide network of computers will come to an agreement among themselves that ownership of the funds has passed from one anonymous person to another. This means Monero cannot be shut down by any one country or authority.
- The network of worldwide computers that verify and agree that transactions have taken place are called miners. The reason they are called miners is that they are rewarded with a small amount of funds in exchange for the work they do to verify transactions. The shared global record of transactions is called the blockchain.
What problems does Monero solve?
Monero balances and transaction histories are completely private. When someone sends you funds, you can’t tell who sent it to you (unless they want you to know). Similarly, when you send funds, the recipient won’t know it was you that sent it, unless you tell them it was you. Because the movements of funds are kept private, no one can tell how rich anyone else is.
Is Monero anonymous/safe?
- Monero's blockchain is intentionally configured to be opaque. It makes transaction details – like the identity of senders and recipients, and the amount of every transaction - anonymous by disguising the addresses used by participants.
- Monero alleviates privacy concerns using the concepts of ring signatures and stealth addresses. Ring signatures are anonymous digital signatures from one member of the group, but they don’t reveal which member signed the transaction.
- Stealth addresses add additional privacy, as these randomly generated addresses for one-time use are created for each transaction on behalf of the recipient. The use of these stealth addresses enables concealing the actual destination address of a transaction, and it hides the identity of the receiving participant.
What makes Monero special?
Monero (XMR) is a cryptocurrency which focuses on being untraceable and private.