Updated: Dec 20, 2019
Monero (XMR) was launched in 2014 as an open-source, privacy-oriented cryptocurrency that was built and is operated on the blockchain concept. Blockchains are the underlying tech behind digital currencies. Monero’s blockchain technology has intentionally been configured to be opaque in a bid to make transaction details opaque. This is what makes Monero a leading cryptocurrency, with a focus on allowing private and censorship-resistant transactions.
This short guide will talk about the reason Monero was designed, its creators, the way it works and the various applications.
What is Monero Designed For?
Most cryptocurrencies, including Ethereum and Bitcoin, are built on transparent blockchains. This means that user transactions on these systems are traceable and openly verifiable by anyone in the world. Further, the transactions may also be potentially linkable to the user’s real-world identity.
Monero was designed to make transactions more confidential and untraceable. It uses leading cryptography that shields the addresses of the sender and receiver, as well as the transacted amounts. Monero uses stealth addresses and ring signatures to alleviate privacy concerns.
Monero also employs the concept of ‘fungibility’, which means that two currency units of equal value are completely interchangeable. The units can be mutually substituted since there is no difference between the two.
For instance, two $1 notes cannot be substituted completely sine they each carry a unique serial number, but XMR or Monero coins can be. This offers participants a safer network where they don’t have to worry about the risks of having their units blacklisted or refused.
The need for such a level of privacy arose after a flaw was identified in the Bitcoin framework, where certain segments of the currency could be banned in the future on the basis of theft, fraud, gambling, etc.
Who Is the Team Behind Monero?
A forum user of Bitcointalk known as thankful_for_today, decided to fork the blockchain Bytecoin since 80% of the coins were already published and several other shady dealings were going on there. The new chain and coins were called Bitmonero, which was later renamed Monero.
The anonymous thankful_for_today soon dropped off the grid, but the crypto was led by a group of users, including Johnny Mnemonic. Currently, Monero is headed by 7 developers, out of which only 2 have revealed their identity - Riccardo Spagni aka “Fluffypony” and David Latapie.
How Does Monero Work?
All Monero transactions feature ring signatures, which help maintain privacy. The network has multiple keys in the form of view keys (public and private) and spends key (public and private).
The view keys are used to generate the transaction and include details, like amount. The spend keys participate in the ring transaction where they are used to verify the signatures.
A unique protocol is created in Monero that allows payee information and balance to be hidden. The use of stealth addresses further strengthens privacy where a one-off address is created by the sender by using the recipient’s public key.
Monero allows the creation of new coins via the usual mining process with a few key differences. For instance, Monero mining does not need specific hardware and works with all leading platforms, including Linux, Android, Windows, and MacOS.3. The system uses a proof-of-work (PoW) algorithm which opens the mining process to a lot of different miners.
What are Current and Future Applications of Monero?
Monero is best used as an electronic currency that allows inexpensive, fast payments anywhere in the world. There are no risks for fraudulent chargebacks or multi-day holding periods.
You can also trade Monero or purchase it on a crypto-exchange, such as Binance, Bittrex, ChangeNOW, and others, with other cryptocurrencies or fiat currency.
XMR is acceptable at several merchants as well, including
SafeDice, Crypto Games, MonerDice, CryptoLotto among others
Airport Décor, FastTech, Franc Villa, and Lingot Swiss and many more
Monovm, NiceVPS, Rohan Law, Rootbox, among others.
A great way to use your XMR tokens where they are not directly accepted as a mode of payment is to buy GiftOff cards. These can then be used to make day-to-day transactions at Google Play, Argos, iTunes, H&M, and Tesco among others.
There is no doubt that Monero will become more alluring in the future as concepts of decentralized payments are accepted more readily. A particularly interesting aspect of Monero is that it is one of the few non-bitcoin based cryptocurrencies, which have the true potential of making it big.
Also, there is a tremendous amount of work being put in by the Monero team to ensure that the crypto coin reaches new heights. Their roadmap states that the team is going to be quite busy through 2019 and into the future. They have Trezor hardware wallets support, Kovri integration and transaction broadcast over Tor lined up. The team is also looking into second layer solutions for scalability and speed, which is a common issue in the crypto sphere.