Over the past few years there has been a lot of talk about cryptocurrencies, one of the most famous being Bitcoin.
Monero is a cryptocurrencies that has sprung up recently with the aim of making improvements on Bitcoin.
Monero is a privacy-oriented open-sourced cryptocurrency that was originally launched in 2014.
It was previously known as BitMonero and later being re-named Monero after a poorly received reception.
The main focus for Monero is its privacy and security features which are a big improvement on Bitcoin.
In this article we will take a look at what Monero is, how it works and what makes it different to other cryptocurrencies.
So What Is Monero?
So first lets take a closer look at where this digital currency came from and the reasons for its creation
Monero originally came on the scene as BitMonero in 2014 which forked from the codebase of Bytecoin.
Due to the launches poor reception, BitMonero was handed over to the community and renamed Monero.
The community developers made some big changes to make the cryptocurrency more efficient, private and secure.
They set a minimum ring signature size to make all transactions private, and added RingCT to hide all transaction amounts.
You can purchase Monero via various exchanges, visit the Monero.org site for a list of exchanges.
Monero uses a CryptoNight proof-of-work hash algorithm to mine its coins.
The average time to mine a block t is 2 minutes compared to Bitcoin at 10 minutes.
It also uses three different privacy algorithms to secure transactions, these are;
- Ring signatures
- Ring Confidential transactions (RingCT)
- Stealth addresses
You might be wondering what all these different algorithms are, so lets quickly go over them.
The Three Privacy Algorithms
Part of what makes Monero private and secure are the three algorithms used, each with its own function.
Ring Confidential transactions (RingCT)
RingCT came into use by Monero in 2016 and allows users to hide value of transactions made.
By using this technique, the only people that can know the amount sent will be sender and receiver.
Although the transaction is visible on the blockchain, there is no way to determine the amount transacted.
Ring signatures is a technology that is used to hide a senders information.
It uses a technique where a group of users sign the transaction making it impossible to tell who the actual sender was.
Stealth addresses make a sender completely anonymous and untraceable and they add privacy to the receiver of a transaction.
The Stealth addresses consists of a spend key and view key to help obscure the receiver’s address.
The sender will generate a spend key address for the receiver when making a transaction .
The receiver will use the view key to scan the blockchain to find the funds sent to them.
Although each transaction is still recorded on the blockchain, the destination of the payment is only known by the sender and receiver.
Although Monero initially had a bad start, it has now been growing in popularity making it one of the most popular cryptocurrencies.
There are currently 16,250,168 coins in circulation out of a possible supply of 18.4 million.
The full supply will not be in circulation until around 8 years after which they will introduce a 0.86% annual inflation rate.
The Monero blockchain is currently five times faster than Bitcoin.
As of writing this article the price of each unit of Monero is worth $120.72 USD having achieved an all-time high of $542.33.
Monero currently has a market capitalization of $2.1 billion USD making it ninth most valuable cryptocurrency.
What Are The Benefits Of Monero?
So what really makes Monero a cryptocurrency deserving of attention?
Lets take a look at some of the main features that Monero has to offer.
- Transaction amounts are private and secure with the RingCT algorithym
so only the sender and receiver will know.
- Users information and location is private and anonymous using Ring Signatures and Stealth Addresses.
- Faster transaction speeds compared to Bitcoin.
With an automatically adaptive block size limit it means it is able to handle future increases in transaction volume.
- Monero’s mining algorithm makes it easier for anyone to mine from a standard PC and laptop.
In comparison, Bitcoin require a special custom made mining chip known as ASICs.
Monero are currently developing the Kovri Project, the project will encrypt and route transactions via various I2P Invisible Internet Project nodes.
This process will hide the IP address of transactions, extending the security and reducing the risk of network monitoring.
Despite Monero’s early setbacks, its focus on making it a private and secure has made it a cryptocurrency to watched.
Monero offers stealth addresses as default, this ensures that users information and transaction amounts are secure.
For those who want additional privacy in their cryptocurrency transactions, Monero could be a good option.
I hope you have found this article useful. If you have any questions, please leave them in the comments below.