Transparency is a unique feature that is very important in blockchain, unlike traditional and centralized banks. But if someone wants to avoid being monitored through this transparency, then what will happen? This is where private networks such as Monero come into play. Some people wish only some of their transactions and actions to be visible to other network users. With this introduction, it is clear that we intend to explain in this article what Monero is, how it was created, what its goals and features are, and how it works. If you also want to know what features the XMR cryptocurrency has that Bitcoin does not have and what the developers have in front of them, reading this article from Asia Signal Blockchain will give you comprehensive knowledge about this cryptocurrency.
Monero digital currency entered the cryptocurrency market in 2014. The symbol of this currency is XMR. It is one of the primary and decentralized cryptocurrencies. It has become popular among users due to its type of transactions. Monero transactions are anonymous and untraceable. The Monero digital currency is Open Source. This digital currency can be used to buy and sell and exchange with other digital currencies. This currency is decentralized like Bitcoin, Ethereum, Ripple, and all other currencies.
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What is Monero XMR digital currency?
Monero is an open-source digital currency in the field of privacy that was launched in 2014. Due to its unique characteristics, this network is known as an attractive, unique, and controversial ecosystem in the cryptocurrency world. Whenever there is talk about the privacy of coins, the name Monero is seen among the options. The Monero blockchain has a particular focus and emphasis on censorship-resistant transactions and confidentiality. But why? This is because most cryptocurrencies, including Bitcoin and Ethereum, have transparent blockchains; this issue is only to some’s taste.
Transparency enables anyone to track transactions and actions performed on these blockchains; That is, if someone traces the addresses of sending and receiving transactions in the blockchain world, he will reach identities in the real world. But on the other side of this world, we have Monroe, who moves in the opposite direction. Monero uses various privacy-enhancing technologies to ensure the anonymity of its users.
Monero is a cryptocurrency built on the principles of unlinkability and untraceability. The word Monero means money in Esperanto. Esperanto is a conventional language for facilitating international relations with simple grammar written in the Latin alphabet. Many people in the world speak this invented language, and it is almost easy to learn. The untraceable nature of Monero means that you cannot link between two transactions, nor can you determine the origin or destination of funds.
Since every transaction in the Monero ecosystem is private, it is also untraceable. This feature makes this coin become a tradable currency. People who accept Monero no longer have to worry about blocklisting. Monero's blockchain is deliberately set up in a vague and opaque manner, keeping transaction details anonymous by hiding addresses. To mine Monero, people can join mining pools or start mining independently. Mining Monero can be done on a standard computer; no special hardware is required. Monero can be run on all major operating systems like Windows, Android, etc.
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History of the creation of Monero
Monero blockchain was launched in April 2014 as a fork of Bytecoin. Bitcoin is another private cryptocurrency that was released in 2012. This cryptocurrency is the first protocol based on CryptoNote and is an open-source technology that aims to address some of the shortcomings of Bitcoin. These shortcomings included the need for ASIC devices for mining and the lack of privacy in transactions. CryptoNote is a privacy-enhancing technology that makes sending and receiving addresses untraceable in every transaction. CryptoNote technology works based on a hash-based Proof of Work (PoW) algorithm that uses a memory-based function called CryptoNight. CryptoNight makes it very difficult for miners to use ASIC devices. This issue can help the Scalability of mining and prevent centralization. This technology is now the basis of many cryptocurrencies that emphasize privacy. Monero was a pre-announced and fair launch of the CryptoNote reference code.
There was no pre-extraction or immediate extraction involved. Also, no part of the block reward is spent on developing the ecosystem. The project’s founder proposed some controversial changes that the community disagreed with. So, the Monero core team started working on the project. The original name of this fork was BiteMonero. Bite Monero was not considered a successful fork at first; Because many essential features, such as optimized block time and block reward system, were not available in this fork, contrary to community expectations. As a result, the community decided to improve this fork. In this way, they changed its name to Monero, which means Coin in Esperanto. Monero's initial team consisted of several developers, most of whom did not wish to be identified. The same issue fueled rumors that Satoshi Nakamoto, the creator of Bitcoin, invented XMR.
Monero has made several significant improvements since its launch. The network's blockchain migrated to a different database structure to provide greater efficiency and flexibility. Also, the existence of a minimum size for ring signatures made the transactions necessarily remain private. RingCT technology was also implemented to keep the number of transactions secret. Almost all the improvements optimized the privacy or security of this network. Next, we will explain the features of this network.
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What is the purpose of creating Monero XMR?
As we said, the distinctive and unique feature of Monero is its untraced ability and privacy. This feature is the goal that the developers of Monero have in mind. The reason for the attraction of Monroe is that it is untraceable. Monero also uses blockchain to track the movement of assets, but using some particular cryptography can hide the sender, recipient, and number of transactions. In expressing the idea and purpose of Monero, we should also mention the people who tried to maintain the confidentiality of data, unlike other transparent blockchains. Overall, Monero is more than just a technology. Among the goals that this network seeks, the following can be mentioned:
Security: Users should be able to trust Monero for their transactions without the risk of errors or attacks. Monero rewards miners with entire blocks; In this way, the most critical members of the network are encouraged to ensure the security of Monero. The safety of transactions is encrypted using the latest and most stable encryption tools.
Privacy: Monero takes privacy very seriously. This network must be able to protect its users in court. This level of privacy should be fully available to all users; they are technically familiar with this network or need to learn about how Monero works.
Decentralization: Monero seeks to provide the highest degree of decentralization in security and network code development. Monero's PoW algorithm resists mining hardware to distribute block rewards fairly. In addition, the development and research of Monero are carried out through global cooperation, and the project follows its work with a high level of transparency. Any decision regarding the development of this network is made public, and the meetings of the main developers of the network are published online.
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How does Monero work?
Monero is a different network with a unique structure; we need to check several things to get to know it. We will explain these things below.
In a cryptocurrency like Zcash, you can choose the level of transparency you wish; But Monero has set the game's rules differently. This cryptocurrency has made user anonymity a default feature; That is, the sender, recipient, and the amount of each transaction remain hidden through three important technologies. These three technologies are:
- Ring Signatures
- Stealth Addresses
- Ring confidential transactions (RingCT)
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A ring signature is a digital signature created by someone in a specific group. Given group members' signatures and public keys, anyone can verify that a group member provided the signature. Still, he cannot say that this signature was exactly the work of any of them. To not know which key was used to generate the circular signature, this signature must be computationally impossible; This is one of the most critical security features of ring signatures.
For example, a ring signature can be used to provide anonymous signatures from a high-ranking official of a given organization. Still, it must not be known which official signed the message. Also, creating a ring signature group does not require any previous settings.
The Monero platform uses a combination of sender account keys to create a circular signature and combines them with public keys on the blockchain; This makes the Monero blockchain unique and private and keeps the sender's identity hidden.
Ring signatures hide the origin of transactions, but with public addresses, you can still see where they are going. This can be problematic if your identity is tied to one of your blockchain addresses.
Hidden addresses are another essential element of Monero that helps implement the privacy of this cryptocurrency. These addresses allow the sender to generate a random address from the receiver for each transaction. After that, the receiver can publish only one address; While all incoming payments are transferred to unique addresses on the blockchain. But the point is that these addresses cannot be connected to the recipient’s address or the addresses of other transactions. Only the sender and recipient can determine where the payment went by using hidden addresses.
So hidden addresses hide the destination of transactions. This is done with a random disposable address. This ephemeral address itself is created based on a public address that is only used for that transaction. The recipient's identity is also hidden by using these addresses and keeping the final destination of transactions hidden. You will get no results if you search for the address in a Monero blockchain browser. Because each created address will be different from the previous one, they cannot be linked together.
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Ring Confidential Transactions (RingCT)
We have seen how the previous two technologies keep the source and destination addresses hidden. RingCT is another exciting technology that hides transaction values in Monero. These transactions were implemented in block 1,220,516 in January 2017. After September 2017, this feature became mandatory for all transactions on the network.
RingCT produces an improved version of ring signatures known as A Multi-layered Linkable Spontaneous Anonymous Group signature. This technology keeps the account balance, origin, and destination of transactions hidden.
If we want to explain the mechanism of Monero using these three technologies briefly, we can say that:
The ring signature is responsible for hiding the sender's address.
Secret addresses ensure the privacy of the recipient.
Circular confidential transactions also provide confidentiality of transactions.
How do mine, Monero?
Now that we know the structure of Monero, we should look at mining in this network. The method of mining Monero is straightforward. The great thing about Monero mining is that you can still mine with a CPU. As a result, using your personal computer and if you have a strong graphics card, you can receive your mining reward. Remember that AMD graphics cards perform better than Nvidia graphics cards for Ethereum mining in the Athash algorithm and kryptonite (which is used to mine Monero). Of course, to mine Monero, it is better to connect to the mining pool; Because the probability of profit is much higher than mining individually.
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Comparison between Bitcoin and Monero
- Inventor of digital currency Monero 7CORE developer group launched its first currency in crowdsourcing in 2014. The limit of its coins is 18 million units +0.3 Monero per minute.
- The blockchain protocol is a type of proof of work and is a digital currency with very high privacy. Monero is not traceable, but Bitcoin is.
- Monero's currency symbol is XMR. Bitcoin transaction fees vary from the wallet. But the Monero transaction fee is 0.004-0.02 XMR / KB.
- Monero follows the cryptonote algorithm. Monero's blocking time is 120 seconds, while Bitcoin blocks for about 10 minutes.
- Monero mining is done by GPU and CPU, and Bitcoin by ASIC miners.
- Monero uses an open-source platform, ring signatures, and anonymous addresses for high security and anonymity of the sender and receiver.
- The development team of Monero is developing more security and upgrading this digital currency.
- Bitcoin transactions are public and show all sender and receiver information. In Monero, only the sender and receiver are able to see each other's transactions and transfers, and no other user will be informed of this transaction.
- One of the first digital currencies was Bitcoin, which used a protocol called Cryptonote; then, in 2014, a new protocol called Cryptonight was created due to a hard fork, which led to the formation of Monero.
Pros and Cons of Monero (XMR)
It is one of the most potent cryptocurrencies in the field of privacy.
It is impossible to link a transaction to a specific person.
It is impossible to trace transactions.
You can choose who can see your transactions.
A large team of dedicated developers is working on the project.
There are limited wallets to hold XMR coins.
It is more challenging to develop applications that interact with its blockchain.
Its extensive use has been criticized on the dark web and by criminals.
Legislators always prevent this cryptocurrency from being listed in exchanges by creating pressure and creating problems for its holders.
Investigating the price trend of Monero XMR
On May 2, 2014, the first Monero price was set at 2.21 euros. But due to the initial weaknesses, this coin’s price reached less than 40 cents at the end of this year! Until February 2016, and for almost a year, the rate of this coin remained practically constant and had minor changes (less than 10 cents). After this period, with a big jump and tripling, the value of the Monero currency went from 45 cents to 1.5 euros.
In March 2020, the $95 level was the highest price ever recorded for Monero. Meanwhile, since December 2019 and for two months, this coin has doubled from 47 to 95 dollars. Of course, Monero was not the only coin that had such growth, but it was one of the first cryptocurrencies in the market that started to grow. The reason for this was the rush of people to invest in various financial markets due to the closures caused by the spread of the Coronavirus.
However, considering the growth rate of Monero since 2017 and that, at that time, far fewer people knew about the cryptocurrency market, we can expect XMR to reach $2,000-$2,500 by 2025 and by 2030, even with prices of 5000 to 6000 dollars can be bought and sold. Therefore, if the investor buys this digital currency at $40, it will reach a return on investment (ROI) of about 7400% by 2025. Of course, we expect this price growth to happen even sooner; Because it is possible that, like in 2017 and early 2021, the digital currency market will experience a rapid and intense jump.
At the time of writing this article by Asia Signal experts, the price of Monero XMR is $145.93, which according to the price charts, this currency will continue to grow.
Best Monero XMR wallets
You can save Monero currency after purchasing the digital wallets we named for you. In the following, we will give a brief explanation of each wallet.
- Monero GUI wallet: This wallet is a desktop wallet. This wallet allows users to send and receive XMR digital currency quickly.
- MyMonero wallet: My Monero wallet is in the category of desktop, web, and mobile wallets. This wallet does not store private keys on its servers.
- Cake wallet: Cake wallet is a mobile wallet for Ios operating systems.
- Ledger Nano S wallet: Ledger Nano S hardware wallet can also store XMR currency and has high security.
- Monerujo wallet: Monerujo wallet is used for Android operating systems and is part of mobile wallets.
You can buy Monero cryptocurrency from many foreign online digital currency exchanges that operate in the field of cryptocurrencies. One of the most popular and currently the most famous foreign online exchanges that support the Monero cryptocurrency is the Binance exchange, which has the possibility of buying and selling the Monero digital currency. Due to existing sanctions, you can use one of Buy stablecoins and then convert it to Monero digital currency. Users always follow privacy cryptocurrency in a certain way.
One of the primary examples in this field is the Monero network that we discussed. In this article, we explained why Monero is popular and how it works. Next, we discussed the technologies used in the Monero blockchain and examined the structure of the addresses together. The anonymity of transactions and protection of privacy is the crucial feature that XMR cryptocurrency provides well; Because it can keep the input and output addresses as well as the transaction amount secret. For this reason, the legislators have been very strict on this coin. Do you think the network will be able to continue to protect privacy and prevent regulatory disruption? How do you see the future of Monero?
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