he Monero cryptocurrency has achieved much of its popularity and public acceptance thanks to its strictly confidential features. In this article we will explain the main concepts, functions and challenges of Monero.
What is Monero?
Launched in 2014, Monero (short for XMR) is an open source, privacy-oriented cryptocurrency that is built on the blockchain concept. These blockchains, which form the technology behind digital currencies, are public registers of participants in activities that show all transactions on the network.
Monero’s blockchain is deliberately made to be opaque. This makes transaction details – such as sender and recipient identities and the size of each transaction – anonymous by masking the addresses used by participants.
Along with anonymity, Monero’s digging process is based on the elitist concept – the principle that all people are equal and deserve equal opportunities. When Monero was launched, the developers did not keep a share of the currency for themselves and relied on the contribution and support of the community for future developments of the virtual currency.
Monero maintains a digging process in which people are rewarded for their activities by participating in mining pools or digging themselves. Monero can also be dug from a standard computer, without the need for specific hardware such as ASIC diggers.
Monero runs on all leading platforms and operating systems, including Windows, macOS, Linux, Android and even FreeBSD.
How does Monero improve privacy?
Monero alleviates privacy concerns by using masked address and signature concepts.
Masked signatures allow the sender of the transaction to hide their identity from other participants in the group. These signatures are anonymous digital signatures from a member of the group, but they do not reveal which member signed the transaction.
To generate a masked signature, the Monero platform uses a combination of the sender’s profile keys by mixing them with public blockchain keys, making them unique and private. This allows the identity of the sender to be hidden, as it is computer impossible to know which member of the group used their key to make the complex signature.
Masked addresses add extra privacy, as these are randomly generated one-time addresses for each transaction by the recipient. Using these masked addresses allows you to hide the actual address of the transaction, as well as hide the identity of the recipient.
There is also the confidentiality of the transaction, which allows to hide its amount. After Monero succeeded in hiding the identities of senders and recipients of transactions, the function to hide the amount was presented in January 2017 and became mandatory for all transactions made through the Monero network.