Last Updated on December 29, 2021
A mineable, proof of work, privacy coin, that, with (the support of its participating community) upholds what is the closest any cryptocurrency can be to being fully anonymous.
Fungible: A unit of currency is identical, and interchangeable with another unit of the same currency. This is in contrast to Bitcoin that was bought on the dark web in years past (it is tagged) cannot be traded on coinbase.
Financial agencies look at the true anonymity of Monero as dangerous as it can be used for nefarious transactions, like money laundering. As a result, Monero has been delisted from some exchanges like OKX and Bitpay.
Two features that allow Monero to keep its blockchain hidden:
- Stealth addresses
- Ring signatures
Normal processes for crypto transactions include a private view key, private spend key, and public address. Monero then employs and extra layer called ring signatures which ensures a “signer of a given message is a member of a group, has a secret key, but due to obfuscation through the group,” meaning, to an observer, any one of the group members could be the signer – “the verifier cannot establish the exact identity of the signer.”
Therefore, in the Monero protocol, if you encounter a ring signature with several public keys, you can only claim that one was an individual signer, without ability to identify which.
Monero recently moved from the CryptoNight mining algorithm, to RandomX to uphold the aversion to ASIC mining rigs. Many believe ASIC mining can lead to the centralization of the network – which is a direct threat to any distributed network – particularly one where its main focus is transaction privacy. (Side note, Bitcoin uses SHA 256)
Tail Emission (Coin Production Plan)
Coin production does not have a hard cap like Bitcoin (with a fixed supply of 21 million) – rather, Monero will employ a method called Tail Emission. The plan means mineable coins will never drop to zero. Block rewards will gradually drop until “tail emission” commences at the end of May 2022. Then, rewards will be a fixed 0.6 XMR per block – providing incentive for miners to continue mining.
This upgrade increased efficiency of Monero transactions, block size dropped 80% and fees were reduced as well.
A C++ implementation I2P network (like Tor) routing your Monero traffic through an encrypted I2P network – obfuscating your IP address and the fact that you are running a Monero node on your computer.