Monero (XMR)
Monero (XMR) is an open-source, peer-to-peer cryptocurrency focused on privacy, offering users a high level of anonymity. Launched in 2014, it uses an opaque blockchain that hides the identities of senders and recipients and the transaction amounts via disguised addresses.
History
Monero originated from Bytecoin, which was developed to address Bitcoin's limitations such as traceability and mining centralization. Bytecoin was introduced in March 2014, and a Bitcointalk forum user known as thankful_for_today forked it to create BitMonero, which later became Monero. The project was launched in April 2014 by a team led by Riccardo Spagni, also known as Fluffypony, without any premine. In December 2019, Spagni stepped down as the lead maintainer to promote decentralization.
| Ticker | XMR |
| Category | Smart Contract Platform |
| Website | https://getmonero.org |
| @monero | |
| https://www.reddit.com/r/monero |
Technology
Privacy on Monero
Monero enhances privacy by encrypting transaction details, user addresses, and wallet balances. It employs Dandelion++, a protocol that conceals the IP address of devices initiating transactions by using a method called flooding. Monero's network ensures anonymity through three mechanisms: ring signatures, stealth addresses, and ring confidential transactions (Ring CT).
Ring signatures
Ring signatures are digital signatures that mix the signature of the individual making an XMR transaction with others, ensuring transaction anonymity by making it impossible to identify the actual signer.
Stealth addresses
Stealth addresses require the creation of a unique, random address for each transaction, hiding the real destination address and the identity of the recipient.
Ring confidential transactions (Ring CT)
Ring CT allows users to prove they have enough funds for a transaction without revealing the amount, maintaining user balance privacy.
Traceability analysis of Monero's blockchain
In 2017, researchers identified potential privacy threats related to ring signature sizes and output merging. The Monero team responded by implementing RingCTs and setting a minimum size for ring signatures.
Tokenomics
Monero uses a proof-of-work consensus mechanism, with miners solving complex problems to add new blocks to the blockchain. There is no maximum limit on XMR coins, but its inflation rate is designed to decrease over time. Once the initial supply cap of 18,300,000 XMR is reached, a tail emission will begin to incentivize miners.
Mining on Monero
Monero employs the RandomX algorithm to validate transactions, which is ASIC-resistant, allowing mining on consumer-grade hardware. This approach discourages mining centralization. In October 2021, Monero introduced P2Pool, a mining pool that offers participants full control similar to solo mining.
Illicit use
Darknet markets
Monero is frequently used on darknet markets. In 2016, AlphaBay allowed vendors to accept Monero, and the site was relaunched in 2021 with Monero as the sole currency.
Mining malware
Some hackers have embedded malware in websites and applications to mine Monero using victims' CPUs, a practice known as cryptojacking. Coinhive, a JavaScript Monero miner, was blocked by antivirus services due to such activities. Similar malware has been identified, including instances linked to North Korea.
Ransomware
Monero has been used in ransomware attacks, with reports indicating its use in 44% of such attacks in early 2018. Some groups prefer Monero over Bitcoin due to its enhanced privacy features.
Monero prohibition in Dubai
In Dubai, new regulations prohibit the issuance and activities related to anonymity-enhancing cryptocurrencies like Monero. The rules define these as virtual assets that prevent transaction traceability through public ledgers without any mitigating technologies.
Monero’s security breach
On September 1, 2023, Monero's community wallet experienced a security breach, leading to the loss of 2,675.73 XMR. Developers Luigi and Riccardo Spagni, who have access to the wallet, are investigating the incident. The breach was not widely publicized, and efforts are ongoing to understand its implications for the community's security infrastructure.