The Monero cryptocurrency provides the maximum level of privacy for its users, and at the time of recording this video, it is the most popular anonymous cryptocurrency. We will tell you how Monero protects your privacy and what are the prospects of this project.
History of Monero
The Monero cryptocurrency has appeared as a result of a fork, or rather during the restart of the Bytecoin cryptocurrency. The Bytecoin network was launched in 2012. It was the first anonymous cryptocurrency run on the CryptoNote algorithm. But over time, it turned out that 80% of all coins are controlled by the Bytecoin developers, so users went “meh” and lost the confidence in the project.
It was then decided to proceed with a fork, and on April 18, 2014, the Monero blockchain took off. The fork was held by a group of unknown developers, but then the project began to attract new developers, and today, the permanent team includes 30 people. The public representative and, in fact, the leader of Monero is Riccardo Spagni, AKA Fluffypony. Riccardo Spagni also happens to be friends with Charlie Lee, the leader of Litecoin. Both cryptocurrency teams cooperate. There are even rumors about the development of atomic swaps between the Monero and Litecoin blockchains.
At the time of recording this video, Monero is at the bottom of the top 10 cryptocurrencies by capitalization with an indicator of $1.7B. During the good old days, however, this figure was $7.5B
Monero is often criticized for the insufficient anonymity level. Edward Snowden, for instance, called it an amateur cryptocurrency. But neither he, nor other critics could prove their position by showing a mechanism for transaction tracking.
The Monero privacy technology may seem simple in comparison to Snowden's favorite Zcash, but at least it hides information about transactions and wallet balances as securely as possible.
Monero bets on the technology of ring signatures. That’s when each transaction is signed by a group of users, and it is impossible to determine who exactly is the real sender. There’s also ring transactions and randomly generated addresses. The funds don’t go directly from the recipient to the sender, they pass through several random addresses, mixing with other transactions. In the end, it becomes impossible to track the sender, recipient and the transfer amount.
This ensures an important property such as the cryptocurrency interchangeability. For example, Bitcoin lifespan can be tracked for checking illegal transactions, so that the seller may refuse to accept payment. In the case of Monero, this is impossible, so one coin of this cryptocurrency is always equal to another in value.
Monero emission is not limited. 18.4M coins are planned to be produced, after which, the reward for each new block will be reduced to 0.6XMR. For mining, there is a Proof-of-Work algorithm called CryptoNight. This algorithm is set in a way to prohibit mining on ASIC devices. Basically, it’s a move against the centralization of mining.
This year’s spring, the mining manufacturer Bitmain released an ASIC for Monero mining. Soon after, the Monero developers held a hard fork and changed the CryptoNight algorithm so that the new-fangled ASIC miners turned into a useless pile of trash. As a result of the hard fork, the Monero network hash rate collapsed by more than 50%. The community finally received evidence of Bitmain lies, which have long been suspected for secretly using their new miners on Monero network before they actually went on sale. In the meantime, four crypto projects announced that they have nothing against ASIC-miners and so decided to split the Monero blockchain, creating new cryptocurrencies in the process. However, all these projects turned out to be low-grade scams.
Monero mining is closely related to the industry of hidden mining, AKA cryptojacking. Popular websites and apps are injected with the script that uses the CPU power to silently mine cryptocurrency, moving all the profit to the script creator. Hidden mining results in slower performance and faster device wear off. Antivirus developers and browsers are trying to fight the issue, but the hackers are taking the lead, while each of us can become a miner involuntarily.
Monero is a leading anonymous cryptocurrency with its own principles, which has proven its reliability and has shown a professional development team with its strong community. This is a guarantee that the project will survive and remain popular despite the position of state regulators.
It’s worth remembering that governments openly dislike anonymous cryptocurrencies and may try to limit their circulation. Like demanding to remove the assets from crypto exchanges. But even if governments decide to take such measures, the network would continue its work, and the exchange would be carried out through decentralized platforms. And as the Japanese and South Korean example shows, the more authorities try to regulate cryptocurrencies, the higher the demand for anonymous assets.