Monero is a cryptocurrency with a very strong focus on privacy. Even by cryptocurrency standards, Monero makes it very difficult for outsiders to track a transfer.
Unlike most Bitcoin derivatives, the Monero system uses the CryptoNight Proof-of-Work algorithm from the CryptoNote protocol – a protocol highly suited for obfuscating the public ledger.
How old is Monero?
The cryptocurrency Monero was launched on April 18, 2014. It is thus a fairly new cryptocurrency compared to Bitcoin.
Data from Februari 2019 show that at this point, Monero had a market capitalization of 1.93 billion USD.
Althugh Monero was created in 2014, it didn’t get big until 2016 when it became a popular currency for darknet market transaction.
Both transactions and account balances are heavily protected in the Monero system to ensure a high degree of privace. Monero utilizes an obfuscated public ledger, and outside observers can not tell the source, destination or even amount of a transaction.
The ring signatures always mix the sender’s input with a group of others. This makes it extra difficult for outside oberservers to establish a link between each transaction that follows, and to find out about the transferred amounts. For each transaction, Monero creates new ”stealth addresses”.
Today’s Monero is more private than the original Monero, because in Januari 2017, the transaction privacy was boosted by the implementation of the Confidential Transactions algorithm created by Gregory Maxwell (chiefly known for his work with Bitcoin). This was also the year when Monero launched Ring Confidential Transactions (RingCT).
Since Monero is considered more private than cryptocurrencies such as Bitcoin, some users carry out a Monero transaction simply to create a break and not link the sender and recipient together when they transfer other currencies. Instead of just sending USD, Bitcoin or Litecoin from A to B, they convert the original currency into monero first.
Naturally, the high level of privacy have attracted some users who wish to carry out transactions in conjunction with illegal or morall questionable activities, and those who are blocked from other more mainstream transaction methods. The Shadow Brokers, a notorious group of hackers, does for instance accept payments in Monero, and the person or persons behind the widespread ransomware WannCry have utilized Monero to hide their tracks when accepting ransoms. In 2017, white nationalists Christopher Cantwell and Andrew Auerheimer switched to Monero after being blocked from various mainstream online payment platforms.
Basic facts about Monero
Subunit: Piconero. 1 piconero = 0.000000000001 minero.
Issuance: decentralised, block reward
Source model: BSD 3-Clause
Timestamping scheme: Proof-of-Work
Hash function: CryptoNight
Block time: It used to be 1 minute, but is now 2 minutes
Monero is the Esperanto word for coin.
Not suitable for ASIC mining
If you are interested in mining Monero, you should know that it was designed to be resilient to application-specific integrated circuit (ASIC) mining. So, ASIC mining – the type of mining that dominates the Bitcoin mining world – isn’ the best choice for Monero mining. For reasonably efficient mining of Monero, most miners opt for x86, x86-64, GPUs, or ARM.
Monero has its roots in the cryptocurrency BitMonero, created in 2014 by the Bitcoin Talk forum member ”thankful_for_today”, who forked the codebase of Bytecoin to form BitMonero.
At first, BitMonero had a dedicated following, but the fan base soon grew disappointed when the new cruptocurrency failed to live up to their expectations, e.g. regarding much sought after changes to block time and tail emission. Eventually, thankful_for_today stepped away from the project and it was taken over by a part of the disgruntled fan base, who renamed it Monero.