Monero (XMR)- A Quick Guide

Just what you need to know.

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Monero is a secure, private, untraceable currency. The project was launched in April 2014 citing a split from the Bytecoin chain which was under controversies for unfair practices. In time, with the work of 30 core developers, Monero strided on its way fairly and now has little left of its predecessor. The project is decentralised, having no central agency, and is completely community driven.

Aim:

Monero aims to make every individual his/her own bank. The project grants the users the power to manage their funds on their own, with security and complete privacy. No other individual or community or institution can pry into this management.

Working:

The features that make Monero (XMR) a true privacy coin are; it cannot be unlinkable, indistinguishable, and untraceable. To understand these features, let us see the components which grant Monero these attributes.

  1. Stealth Addresses: When making a transaction on the XMR blockchain, the destination addresses are hidden in a way that only the sender and receiver can see them. What is visible on the Blockchain is the cryptographic hash which is unique to each transaction. These hidden addresses are called stealth addresses. They also render it impossible to determine XMR distribution among different addresses. Thus, senders, receivers, and transactions cannot be linked.
  2. Separate Transaction Units: Any fund or amount of XMR sent to an address is broken into many discrete units. For example, a payment of 10 XMR would be broken into 5, 3, and 2 XMR. Each unit will appear on the blockchain to be sent in distinct stealth addresses. But in fact, they will all converge at the receiver’s address. Thus, no matter how big or small the amount of XMR sent, determining the true amount among the sea of discrete units moving in the Blockchain will be an extremely complicated process.
  3. Ring Signatures: A Monero address (like Bitcoin) is a cryptographic public key. Funds are transferred by using its associated private key. From the point of view of a tracker, when the funds are broken into discrete units, each unit is authorized by a private key, and any private key which authorized a similar amount ever, since the genesis block in the Monero Blockchain, can be taken to be a signatory to the transaction. The number of such signatories depends on the mixing depth chosen before the transaction. A value of 6 would give 1 (the real signatory) + 5 more signatories to the transaction. The Ring Signature makes sure that these transactions cannot be tracked back to the specific computer’s IP address. Thus, the transactions become untraceable.

But this technique revealed the discrete units. It was improved upon by introducing Ring Confidential Transactions (RingCT) in Jaunary 2017 which hid the entire amount being transacted. From September 2017, RingCT is mandatory in all transactions.

Average block creation time for Monero is nearly 2 minutes and the blocksize is variable.

Monero tail emission which is the constant increase in the number of Monero coins at the rate of 0.6 XMR/min. This is already set to commence end of May 2022 when a total of 18.132 million XMR will have been mined and thus generate 157788 XMR each year.

(For more detailed information check out this reddit post here).

Consensus Mechanism:

Proof of Work (Cryptonight hashing algorithm).

Advantages:  

  1. A true privacy coin with a dedicated team and a supportive community.
  2. Allows anonymous transactions which cannot be linked and tracked.
  3. It is a fungible asset.

Refer this article to see the benefits of using Monero over Bitcoin.

Disadvantages:

  1. The transactions are rather expensive.
  2. The Blocksize grows as the demand increases.
  3. Monero uses more system resources than most other cryptocurrencies.
  4. Often associated with use in black markets.

Major Partnerships:

Market:

Buy XMR from:

  • HitBTC (BTC/USD/ETH/TUSD/DAI/EURS)
  • Binance (BTC/ETH)
  • Poloniex (BTC/USDT)
  • Bitfinex (BTC/USD)
  • Bittrex (BTC/ETH/USDT)
  • Changelly
  • Shapeshift

Store XMR in:

  • Official Monero Wallets can be accessed from here.
  • MyMonero web wallet.

Useful Links:

I am a metalhead cryptocurrency and Blockchain enthusiast, studying architectural designing and construction to shape a new world for my own.

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