Monero: Keep it Private
Monero: Keep it Private

By M87 | Blockchain_Space | 2 weeks ago


Monero (XMR) has been known as the privacy-focused coin because of its advertized feature of having transactions untraceable. Monero has been around since 2014 and has been holding its place in the market for some time now.

Monero Origins

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Monero uses the CryptoNote protocol and it has been around since 2012. The protocol was used with Bytecoin (BCN) and after some time, Bytecoin began to gain traction as developers noticed how well the code was for the project. After having Bytecoin running for about 2 years, developers noticed that 80% of BCN have been minted already. This was a serious issue and so in 2014, a group of developers in the community decided to fork Bytecoin into what became known as Monero today.

Monero in Esperanto means "Coin" and it was originally supposed to be called Bitmonero but was later changed.

Similar to Bitcoin, the original developer for the Bytecoin code remains anonymous. That wasn't much of a concern because of how the project is privacy-focused and promotes anonymity. Even when it comes to Monero's own core development team, only 2 of the 7 members have revealed their identity to the public.

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Currently the #14 coin by market cap, it's holding up in 2020 with a price of around $80 at the time of writing this.

Monero Privacy

Privacy is one of the main features that make Monero appealing to many in the crypto community. 

Monero is secure

Monero is a decentralized cryptocurrency, meaning it is secure digital cash operated by a network of users. Transactions are confirmed by distributed consensus and then immutably recorded on the blockchain. Third-parties do not need to be trusted to keep your Monero safe.

Monero is private

Monero uses ring signatures, ring confidential transactions, and stealth addresses to obfuscate the origins, amounts, and destinations of all transactions. Monero provides all the benefits of a decentralized cryptocurrency, without any of the typical privacy concessions.

Monero is untraceable

Sending and receiving addresses as well as transacted amounts are obfuscated by default. Transactions on the Monero blockchain cannot be linked to a particular user or real-world identity.

Monero is fungible

Monero is fungible because it is private by default. Units of Monero cannot be blacklisted by vendors or exchanges due to their association in previous transactions.

 

-GetMonero.org

The privacy feature and having transactions untraceable attracted some negative attention with many reports of Monero being the preferred coin to use for illicit activity. Dark Markets began accepting XMR and some ransomware also began to require payment in the privacy coin. 

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However, over the years reports have revealed the untraceable feature of Monero wasn't so untraceable due to some bugs and vulnerabilities. While fixes have been made, time passes and chain analysis tools have gotten better so the untraceable nature is always a cat and mouse game. 

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AlphaBay was a popular dark marketplace that began accepting XMR but eventually was shut down by law enforcement. Even though AlphaBay is shut down, the latest chain analysis tools are potentially capable of identifying thousands of transactions during the 7 months AlphaBay accepted Monero with its unpatched vulnerabilities.

Read the official technical guide for more details on the technology behind their privacy features.

Mining

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Monero used a different mining algorithm compared to Bitcoin and others. The CryptoNight mining algorithm was designed to cater to CPUs and GPUs while having the feature to be resistant to Application-Specific Integrated Circuits (ASICs) since ASICs were dominating Bitcoin's mining.

It is still capable of mining Monero using CPUs and with that, came growing problems like malware and websites integrating hidden miners that use a visitor's CPU resources while using the website. The well known Torrenting site ThePirateBay was dealing with more controversy as it was "testing" the Javascript miner at an attempt to replace the revenue generated from ads. 

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As more time passed, more ASIC miners were keeping up with the forks Monero were having when it was designed to be ASIC resistant and eventually changed over to the RandomX mining algorithm when they had their hard fork back on November 30, 2019.

Growth

While Monero went through the bull market and the privacy coin phase, it has seen some growth but that is a continuing battle.

It was reported that many famous musicians were beginning to accept Monero for purchases on things such as merchandise or their music. Many have dropped using Monero as a payment method since, but some still offer it and maybe even with a discount.

Monero started facing more issues that relate to its privacy features. Aside from the issues with malware and vulnerabilities, Monero began to face challenges keeping its coin listed on exchanges. With part of the success of a coin is its support across centralized exchanges, new regulations are prompting exchanges to delist XMR due to compliance risks. The nature of anonymous untraceable transactions does not work with regulators but Monero continues to fight the privacy battle.

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Despite facing issues, Monero's adoption has been making its way going into 2020.

When the November 2019 hard fork happened that switched the mining algorithm over from CryptoNight to RandomX, it also introduced a new system to incentivize users to run nodes called RPC-Pay. 

RPC-Pay is a new feature added to monerod and wallets that enables payment for RPC calls using mining hashes.

 

-MoneroOutReach

There are already many networks that have their implementations of incentivizing node operators, but Monero didn't have any built-in system until now. This allows for a more decentralized network with node operators that are willing to run one that can help pay for itself and support the network.

The hardware wallet Trezor announced on January 17, 2020, it now fully supports XMR.351665157-ca8deaa745f846e5e93fe6a14764c288bea993dc0c33a79f509e25f6ab87d7fc.png

 

Monero has continued to climb even with the delisting from exchanges. Will we see continued growth for the privacy coin? Depending on how the battle for privacy goes and if we see a shift in the market liquidity move to Decentralized Exchanges (DEXs), it can still go either way.


M87
M87

Working towards digital sustainability.


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