Monero — One of the leading privacy focused and truly anonymous cryptocurrency
There are two fundamental problems in the entire cryptocurrency ecosystem which people discuss the most, one of them is scalability and the second one is privacy. Scalability issues are widely addressed these days with efficient consensus algorithms, Layer-2 networks, and sidechains, etc. Since the emergence of the crypto space, many new cryptocurrencies have emerged who aim to solve these two problems collectively, but none of them succeed except for a single strong contender — Monero, which is denoted as XMR.
Anonymity and Privacy
Unlike other cryptocurrencies in the market today, Monero solves both the scalability and privacy problem in a very unique manner. However, Monero is best known for its privacy and anonymity. As you all might know, Bitcoin is not completely anonymous, and any one can see the transaction details and balances in a particular wallet address. The transactions can even be tracked by the authorities, because all the information about the sender address and recipient address are known which makes it easier to keep an eye on the activity happening in the wallets.
How Monero solves the problem?
To solve this problem of privacy, Monero uses a very efficient cryptographic and digital signature algorithm called ‘Ring Signatures’. These ring signatures generate random wallet address to obfuscate the transaction, for both the sender and recipient. Monero uses traditional ‘inputs’ and ‘outputs’ mechanism to fund a particular transaction. Ring signatures not only obfuscate the addresses, but it also hides the transaction inputs, transaction outputs, sender’s information and receiver’s information. It also hides the amount of coins that you are sending by dividing the transaction into different batches.
With Monero, the receipts can generate ‘stealth addresses’ which can’t be traced back to your original address. For the stealth addresses, a particular transaction broadcast mechanism is used called KOVRI (I2P Router) which ensures that all the transaction details are private and the money gets into the stealth address thereby reaching the recipient. Just like Bitcoin, Monero is also powered by Proof of Work (PoW) consensus algorithm with a very notable difference. Bitcoin’s PoW is not ASIC resistant, which means that people with a lot of ASICs can create centralization.
Monero uses a different variant of the PoW which is ASIC resistant, and allows people that have less computing resources to mine Monero and participate in the network. Monero actively changes its protocol to makes it more efficient, which resulted in a lot of hard forks from the members who didn’t agree with the changes made. The notable hard forks of Monero includes Monero Zero, Monero Original and Monero Classic as shown in the image below.
Monero has an unlimited supply, and is currently traded at around $92.6 which is quite affordable. Due to its popularity, Monero has surpassed a total market cap of $1.5 billion USD, which makes it the 10th largest cryptocurrency today. Monero has a daily 24h trading volume of just over $106 billion USD which its quite impressive. At its peak, a single XMR was worth over $494 (January 7th, 2018) but got affected by the crypto winter. It is slowly regaining its value and at the currency price of $92.6, we believe that it is the ‘must have’ coin in your portfolio.