Monero is electronic cash with a focus on private and censorship-resistant transactions. The project was launched in April 2014. No ICO, No insta-mining, no airdrops.
Now most existing cryptos, including Bitcoin and Ethereum, have transparent blockchains, meaning that transactions are openly verifiable and traceable by anyone in the world. Furthermore, with a bit of detective work, sending and receiving addresses for these transactions can be linked to a person's real-world identity.
Monero takes privacy very, very seriously. I’m going to highlight 4 mechanism they use to do that really well.
Firstly they use ring signature cryptographic technology. This means that the senders address is mixed with a ring of other senders, making it exponentially more difficult to establish a link between one transaction and the next.
Secondly they use stealth addresses. These are randomly generated, one-time addresses created for each transaction. With this feature, Monero transactions cannot be linked to the published address of the sender or the recipient.
Thirdly a mechanism called “ring confidential transactions” hides the amount of the transaction.
Finally if that wasn’t enough, there’s a new initiative called the Kovri Project, that will also hide a user's IP address and geographical location.
By providing such a high level of privacy, Monero is fungible, meaning that every unit of the currency can be substituted by another unit. This is different from other public-ledger cryptos where it’s possible that addresses with coins previously associated with undesired activity could be blacklisted or refused.
Now let’s look at the Coin dynamics.
There are currently 15.8 million coins in circulation, all emitted via mining. Monero uses dynamic block sizes meaning they can be different sizes depending on some algorithm presumably taking into consideration time between blocks and the amount of transactions waiting to be inserted into a block.
The block reward goes to the miner on a proof-of-work reward mechanism and those miners can only mine on normal computers, not those crazy, monster machines used on bitcoin farms. This prevents the likelihood of one miner buying enough hash to hijack the network.
There is no coin cap, instead block rewards go down until 2022 at which point each block mined will be awarded 0.6 XMR per block. This will continue into perpetuity adding about 1% inflation per year.
In Conclusion, Monero is hands down the most private of the privacy coins. It has a sensible coin emission strategy and will continue to carve out a niche among the crypto currencies where privacy is required. It will be interesting to see how governments react to it in the future, but at this point, I don’t really see what they could do about it, even if they didn’t like it - which is exactly the point, isn’t it.
I hope you enjoyed this video. Drop a comment on YouTube or hit me up on Twitter if you have any questions.
