What is Monero?

What is Monero?

By Kluma | InterestingCrypto | 26 Jun 2020


What is Monero?

Monero (XMR) is an open source cryptocurrency in the protocol of which a number of transaction anonymization techniques are implemented: stealth addresses, ring confidential transactions.

On the Monero network, only the participants in the transaction and those who will be given a special access key know the amount, sender and recipient addresses.

 

Who, when and how launched Monero?

The launch of Monero took place in April 2014 under the name BitMonero. The protocol is based on the code base of the CryptoNote and Bytecoin projects. Later the name was changed.

The CryptoNote protocol was introduced in 2012 by the developer Nicolas van Saberhagen. He described cryptonote in the " White Paper v 1.0 cryptonote » and « White Paper v 2.0 We do cryptonote ».

The first mass implementation of CryptoNote was the Bytecoin cryptocurrency. The reputation of the project was undermined by the premine, during which the developers left 80% of the total issue. Led by Ricardo Spagni, some users created their own version of the coin with zero premine.

Almost all Monero developers use aliases. Only two revealed their identities - Ricardo "Fluffypony" Spagni and Francisco Cabanas.

Cryptocurrency is in third place after bitcoin and Ethereum in terms of the number of developers, but only some of them write code on an ongoing basis.

 

What anonymization technologies are used in Monero?

Ring Signatures

In cryptography, a “ ring signature ” allows a member of a list of signatories to anonymously sign a message without revealing an identity.

Ring signatures in Monero include impurities (mixins, decoys) in the transaction in the form of inputs / outputs of other people's transactions completed earlier. They help to confuse traces: it is impossible to determine exactly where in the transaction there are “impurities” and where are real funds.

For a long time, the function of adding impurities to transactions was unavailable, and then it was offered for use optionally. Users ignored her. This allowed researchers to deanonymize about 64% of all transactions made before September 2017.

Ring Confidential Transactions (Ring CT)

Confidential Transactions technology hides time, payment amount, and participating addresses.

Ring confidential transactions were implemented at Monero in January 2017. Since September 2017, this feature has become mandatory for all translations. At least 10 impurities are automatically added to the transaction.

Stealth addresses

Transactions in the Monero network are performed through unique one-time “stealth addresses” created by sender wallets. Coins are sent to this address.

Addresses hide the connection between the sender address, the recipient address, and any other transactions / addresses.

The recipient will not lose anonymity if he accepts many payments to one address, since incoming payments will go through different stealth addresses.

Future implementation of the Kovri I2P protocol in Monero

The protocol is written in C ++ based on I2P. It will allow the transfer of all Monero user traffic (IP and other metadata) through the sites of anonymous volunteers, similar to Tor.

The user discloses his IP address when making a transaction. Despite the fact that it is not written to the blockchain, real-time network scanning will fix IP.

 

What are Monero addresses, and what are the keys to?

Addresses in Monero consist of 95-106 characters and begin with the number 4.

Standard addresses (raw address) are the technical basis for sub-addresses and integrated addresses. They are useful for:

  • receiving block rewards in case of solo mining, as other types of addresses are not supported;
  • receiving payments from senders who combine several payments into one (like mining pools).

An integrated address is an ordinary address with an identifier (ID) encrypted in it. It allows you to distinguish between incoming transactions (in the case of exchanges) and payments (in the case of merchants).

A sub-address is generated using a standard address and provides the highest degree of anonymization.

Sub-addresses are stored in groups in so-called accounts in the wallet. Accounts can be assigned labels, for example, Mining, Trading, and so on.

Storage of several accounts within one mnemonic phrase (SEED) is convenient when recovering a wallet. In addition, you know exactly who sent the funds to you for what. Create a new address for each incoming payment.

Two versions of the wallet are available for download : for the command line (CLI version) and with a graphical interface (GUI version, recommended for most).

 

Why do we need private and public Address Keys?

The public view key shows the stealth addresses related to the transaction.

The public spend key is used by the sender's wallet to generate the public key for the stealth address.

A private view key is required to view information about address transactions. If you share it, then allow the other person to view the amounts and history of all incoming transactions. It will not display outgoing transactions correctly unless you also provide key images associated with them.

Private spend key (private spend key) opens all the information about the address and allows you to spend coins on it.

 

What are the benefits of Monero?

  • The dynamic block provides low fees and fast transaction confirmation in the event of a spam attack. If there is enough space in the block, there is no queue from transactions. The network monitors the number of transactions in the last 100 blocks. If there are more of them, the block size increases, but no more than twice the current size.
  • Tail emission provides financing in which a fixed money supply ceases to be so over time. To compensate for the “lost” coins and stimulate miners after May 2022, the network will be guaranteed to add 0.6 XMR to every 2 minutes to the base money supply (at 18.4 million coins). Monero is programmed to gradually reduce the block reward by analogy with Bitcoin.
  • Multilingual mnemonic phrases (SEED phrases) are useful when an attacker detects a piece of paper. Even an experienced thief (or investigator) may not realize that it is SEED if the words are not written in English.

 

How easy is it to attack Monero?

In 2019, researchers launched the Janus Attack. Imagine there are two sub-addresses in your Account. They are also available in public forums.

You do not want one of the addresses associated with you, while a person wants to prove such a connection. To do this, he agrees with you about the transaction, and then sends the payment to the wrong address. If you don’t notice that the payment came to the wrong address and confirm receipt, then you will reveal yourself.

In addition, there is a transactional flood attack. It consists in sending a huge number of small transactions to compromise the anonymity of other users by controlling impurities. The cost of the attack is estimated at $ 1.7 million,

 

What caused the delisting of Monero on a number of exchanges?

Under pressure from the FATF and local exchange regulators, anonymous cryptocurrencies are removed from the listing in an attempt to ensure legal compliance.

In Monero, there is no way to deanonymize transactions even with tools like Chainalysis and Crystal Blockchain, which prevents exchanges from getting rid of gray capital.



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