What is Monero (XMR)? Invisible Cryptocurrency

monero

According to Monero’s site: Monero is a secure, private and untraceable currency system.

Monero (XMR) uses a special encryption method to ensure that all transactions are 100% disconnected and untraceable.

 

In an increasingly transparent world, you can see why something like Monero (XMR) can become so attractive. In this article, we will know the mechanism behind Monero (XMR) and see what makes it so unique.

Monero’s origins

What is Monero
What is Monero

We need to look at Monero’s history to know what is Monero (XMR), what is not. In July 2012, CryptoNote’s first real application, Bytecoin, was launched. CryptoNote is an application layer protocol that feeds several decentralized currencies. While it is similar to the application layer that runs bitcoin in many directions, there are many areas where the two are different from each other.

Bytecoin promises to come, but people have realized that many suspicious things have returned and 80% of the coins have already been published. Thus, it was decided that the bitcoin blockchain would be forked (hard fork) and the new coins would be called Bitmonero. Later Bitmonero was called Monello, only to be thrown out of his head. Monero means “coin” in Esperanto. In this new blockchain, one block will be ejected every two minutes and added.

Monero review
Monero review

A group of 7 developers heads Monero (XMR); five of them choose to stay anonymous, and two of them publicly disclose their identities. These are David Latapie and Riccardo Spagni (“Fluffypony”). The project is funded with open source and massive funding.

Monero’s features

What makes Moneki a trendy and demanding thing? What are the unique features of the CryptoNote algorithm? Let’s examine it.

Your money management is entirely up to you

You have complete control over your transactions. You are responsible for your money. Because your identity is private, nobody can see that you have not spent your money.

It can be exchanged

what is xmr
what is xmr

Another exciting feature that he has gained due to the importance he has given is the fact that he can be changed or exchanged. What is changeability? Investopedia defines changeability as:

“Variability is the exchange of a good or an asset with other individual assets or with the same kind of assets.”

Dynamic Scalability

Bitcoin’s scalability issue has been a favorite topic in the crypto circles for the past few months. I give you a summary of the problem; BitCoin was originally created with a limit of the 1MB block size. Initially, BitCoin did not have a block size limit, but the size limit was set to prevent spam operations.

Monero (XMR) does not have a “predefined” size limit. On the other hand, but this means that malicious miners can clog the system with large blocks. To prevent this, a block penalty is applied in the system. It works like this:

What is Bitmonero
What is Bitmonero

First, the median size of the last 100 blocks called M100 is taken. Now, let’s assume that the miners get a new block and call each one “New Block Size” (NBS-New Block Size). In the case of NBS> M100, the block award is reduced by the quadratic dependence of the NBS over the M100.

This means that if the NBS is greater than M100 [10%, 50%, 80%, 100%], the block award is reduced [1%, 25%, 64%, 100%]. Generally, blocks larger than 2 * M100 are not allowed and blocks of <= 60kB are always exempt from block award penalties.

ASIC (Application Specific Integrated Circuit) Resistance

Monero (XMR) is not precisely “resistant to ASIC”, but the production cost of ASICs suitable for Monero (XMR) is so high that it is not worth it. Why so? Remember, we told you that you are based on the CryptoNote system, which makes Monero (XMR) distinctly different from Bitcoin. The hashing algorithm used in CryptoNote based systems is called “CryptoNight”.

Cryptonight was created to establish a fairer and more centralized monetary system. The mining of cryptocurrencies containing Cryptonight cannot be done. It was hoped that it would prevent the formation of mining pools and distribute the currency more evenly.

Well, what can be traded and what cannot be traded?

What is Monello
What is Monello

Let’s explain by example. Let’s say you borrowed 50 TL from a friend. This friend can still repay your debt for a full $ 50. You can even pay 2 TL 20 and 1 TL 10. The Turkish lira and many other currencies have a changeable feature.

Now let’s examine a slightly different example. After borrowing a friend’s Ferrari for the weekend and then giving him a different vehicle as the Renault Clio, you probably have a punch in your face. Even if you borrow Ferrari from your friend, and also if you return to a different Ferrari, he will not accept it. Here the car is an example of an “immutable” presence.

What is the meaning of changeability when it comes to crypto money?

Cryptographic paradigm “changeability.”

Let’s take a look at bitcoin, for example. Bitcoin is proud to be an open book. But this means that everybody has to see the transactions inside them, and more importantly, everyone can see these transactions. Basically, let’s take the meaning of this as an example. For example, suppose you bought a bitcoin that used to be illegal in the past. This illegal transaction history remains a “stain” forever on the bitcoin you have.

7d Monero Chart of Coinmarketcap
7d Monero Chart of Coinmarketcap

In some bitcoin service providers and stock exchanges, these “polluted” money will never be as valuable as “clean” money. This is something that kills changeability and is one of the most used criticisms against bitcoin. After all, why would you be fined for using one of your previous owners to use bitcoin you bought illegally?

That’s where Monero (XMR) is on the scene. Since all the data and transactions are unique, nobody knows what operations Monero (XMR) has done before, and they do not know what they buy with Monero. Never understanding the transaction history means that “transaction” does not exist. As a result, the concept of “polluted” Monero and “clean” Monero is absent and can, therefore, be changed!

So, what are the features that make CryptoNight ASIC-resistant?

Cryptonight needs 2 MB of fast memory for its operation. This parallelization is limited to how much memory the hash can compress memory on the chip, and is to keep it reasonably cheap. 2 MB memory, use much more silicon than SHA256

The overview key is used to create a one-time secret public address for sending funds to the buyer.

The private appearance key is used by the recipient to browse the blockchain to find the funds that have been sent.

This is the general appearance of the process.

Key

Spend keys: The view key is often used for the recipient of a transaction, but the spending key belongs to the sender. As above, there are two spending keys: an open spending key and a special spending key.

Keys

  • An open spending key helps the sender participate in ring transactions and verify the signature of the key image.
  • The private spending key helps create the key image that enables them to process transactions.
  • The open spending key forms the second part of the Monero (XMR) address.
  • In the meantime, the Mono address is a 95 character string made up of the open spelling and general appearance key.
  • This may be very confusing at the moment, but it will keep your knowledge in mind and will become clearer with later chapters.

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About the author

I am graduated from the faculty of communication. I have worked for major companies in the communication field, and acquire more than 12+ years of experience. I like to read empowering books, traveling and researching useful stuff on the internet. For a few years now, I have cultivated and developed a passion in the cryptocurrency world. I have decided to dedicate my time to create some posts on my blog about cryptocurrencies in general. Cryptocurrency World is growing fastly and will have longevity future however it has just born. I intend to improve myself on blockchain technology and share my knowledge.

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