What is Monero Coin (XMR)?
XMR Coin Price
Monero coin (XMR) is a secure, private digital currency that uses ring confidential transactions to help users stay discreet. This currency is also very fungible, meaning, it’s not likely to ever be blacklisted by exchanges or vendors due to associations and previous transactions.
THE HISTORY OF MONERO COIN (XMR)
Monero was started as a fork of Bytecoin in April of 2014 because the users of bytecoin didn’t like that 80% of coins were already published, and the security behind them wasn’t as spectacular as it could have been.
The protocol developed called CryptoNote was originally launched by a pseudonymous author named Nicolas van Saberhagan in 2013 and then integrated into what would later be XMR.
Monero was originally launched on BitcoinTalk forum from an anonymous user named “thankful_for_today.”
Originally called Bitmonero or (bit for bitcoin) and Monero (for coin) that was five days later shortened as just Monero, being that monero means coin in Esperanto.
Monero (XMR) is founded by a group of 7 individuals, 2 of whom remain anonymous even to this day, lending more credibility to the design and ability of Monero to be one of the top privacy coins.
Then in 2016, its market capitalization rose in popularity as it was being used more frequently on the darknet market, Alphabet.
Monero as of now (November 2017) sits at:
THE PURPOSE OF MONERO COIN (XMR)
Monero was developed to be an open-source Cryptocurrency with a private, secure, decentralized and scalable platform for helping users to control their wealth and funds - regardless of where they want to spend them.
It is for these uses that monero thrives.
Monero is used by people wanting to keep their identity private, transfer funds, and even buy illicit materials. This can range all the way from banned books in many countries or drugs in others.
THE FEATURES OF MONERO CRYPTOCURRENCY (XMR) & WHAT MAKES IT DIFFERENT
Monero Is A Secure Cryptocurrency
Using a decentralized platform, XMR is secure digital cash operated by a network of users.
There are no third parties that need to be trusted to secure or process payments with Monero, but similar to Bitcoin, Monero runs a mining operation and allows transactions to be confirmed by digital consensus, and then recorded on their blockchain.
Privacy Is Monero’s Speciality
Monero uses a ring signature and rings confidential transactions to help keep the amounts, origins, and destinations of transactions secure.
What are Ring Signatures and Ring Confidential Transactions?
Ring signatures were first described in a 2001 paper by academics from MIT and The Weizmann Institute.
Here’s what Moneropedia says about Ring Signatures:
“In cryptography, a ring signature is a type of digital signature that can be performed by any member of a group of users that each have keys. Therefore, a message signed with a ring signature is endorsed by someone in a particular group of people. One of the security properties of a ring signature is that it should be computationally infeasible to determine which of the group members' keys was used to produce the signature.
For instance, a ring signature could be used to provide an anonymous signature from "a high-ranking White House official," without revealing which official signed the message. Ring signatures are right for this application because the anonymity of a ring signature cannot be revoked, and because the group for a ring signature can be improvised (requires no prior setup).” (1)
By using Ring Signatures Monero’s ability to hide and help obfuscate your addresses and private data keeping your wallet completely safe and private.
Now ring transactions for Monero, on the other hand, work in a similar encoded way.
Instead of sending a transaction one way, the transaction is split into multiple transactions at different values that all add up to the value being sent.
This both puts that value public, but hides it in ambiguity as you are then able to see every transaction and not know what is going where (we will talk a bit more on this below.)
Monero Is Fungible
Because of the security and privacy, XMR is fungible or in other words; it won’t be blacklisted or banned from exchanges or vendors because of any affiliation with an association or previous transactions on the platform.
Think of it like cash when it comes to spending, you can spend the U.S. dollar on drugs, or on bandages and in either case it isn’t banned because no one can trace where that cash has been.
The same holds true if you borrow $10 from a friend. When you go to pay that friend back, it doesn't have to be the same $10 bill. It can even be five ones and a five dollar bill.
What Is Fungibility and Why Is It So Important?
Fungibility is the concept that all Monero have the same value regardless of who owns them or what their history is.
The reason that this becomes so crucial to the success of Monero is that there can’t be any discrimination on a single XMR coin, as its past is private from other users.
That way exchange, broker, or business won’t stop a transaction or devalue the coin based on where it has previously been.
Monero Has Dynamic Scalability
Scalability is one of the hottest topics in the field of cryptocurrency.
To get into the market of billions of people, each cryptocurrency will need to scale and get faster than it currently is for mass adoption.
Unlike Bitcoin with its 1mb blocks, monero has no pre-set block size limit.
Bitcoin originally didn’t have a limit, but after scaling and to prevent spam transactions it was locked into one MB block sizes permanently.
Now in some cases, this could hurt Monero because miners trying to thwart Monero can back up the system using huge block sizes. Although, there is a block reward penalty built into the system to prevent this.
The bigger the skew from the average block size, the more the rewards are penalized for Monero miners.
XMR Provides Multiple Keys (One Public and One Private)
Monero provides all users two keys at the start:
- A public key which is used to view and generate the one time address to show where funds will be sent to the receiver.
- While the private key is used to find and recover the XMR coins sent to them.
It's similar to having two keys to get into a locked door. The first key helps to activate and see half of the user's address while the second key allows the address to collect the coins being sent.
On top of this, there are also two Spend Keys for Monero - a public spend key (helping the sender take part in the ring signature and verifying the transaction) and a private spend key (which creates the Key image for sending transactions).
This public spends key is the second key needed to make up the Monero address.
HOW MONERO TRANSACTIONS WORK
By CryptoNote official site:
Monero transactions start with multiple decoys that all hold the same likeliness of being the decoy.
This all occurs through the ring signature we briefly touched on earlier in the article.
Although, a huge problem addressed at the beginning of any cryptocurrency creation is double spend, or the ability to use one token twice.
By giving each transaction its unique key image, it helps to ensure that there isn’t double spend, as miners can match up each key address.
Then what happens is spectacular...
The public view key and public spend key find each other, and then the private view key and private spend key after verification allows the money to be transferred and collected respectively.
This is the creation of a stealth address (the combination of the private spend key and private view key) leaving a one-time transactional address.
As a bonus, the ring confidential transactions split up the amount sent into multiple different transactions using RingCT and hiding all transactions in the blockchain.
Finally resulting in an anonymous, secure and private transaction between two wallet addresses.
WHAT WE AT GCA THINK OF MONERO COIN (XMR)
Monero is one of the most solid cryptocurrencies there is.
Granted it has been cracked though, and after an update in the algorithm it shouldn’t happen again, but that is something to be cautious about.
Otherwise, if you are trying to do transactions in an encrypted way with good security and anonymity Monero is one to hold.
Although, when it comes to storing monero there aren’t many wallets that currently accept or hold monero besides their wallet.
MORE FROM THE CRYPTOCURRENCY INDEX
What is Nano Coin (Previously Raiblocks) NANO Coin Price What is NANO? | A Quick Overview Nano is a cryptocurrency with a focus on being a currency, similar to Bitcoin, but in an instant, feeless and scalable way. Mostly it’s trying to take out all of the negatives of Bitcoin, without adding any other negative…
What is UTrust (UTK)? UTK Coin Price What is UTrust? A Quick Overview UTrust is a payment mechanism designed to help combat user fraud, chargebacks, and the volatility of markets in a decentralized peer-to-peer way. Using a payment processing solution that is not only safer, cheaper, and more versatile (accepting cryptocurrency) – it helps protect…
What is MakerDAO MKR Coin Price DAI Coin Price What is MakerDAO? | A Quick Overview MakerDAO is a decentralized autonomous organization based platform that contains the maker coin (MKR) which acts as a governance coin, and the DAI which is a stable digital currency. This creates an ecosystem wherein MKR tokens, and their holders…