Monero: The King of Privacy

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What most people think Bitcoin is, is actually Monero. Secure, private and untraceable money for everyone who wants to stay anonym.

Monero wallpaper
Source: Wallpaperaccess

Bitcoin is born with a vision of a decentralized, trustless network where anyone can send or receive BTC and participate in the network. However with time, it increasingly became centralized.

A bitcoin laying on top of a dollar
Source: Bermix Studio on Unsplash.

Whales hold most of Bitcoin’s supply, large companies are mining with thousands of ASIC’s, the largest banks and institutions are investing into it. However there is a project that still holds closest to the cypherpunk ideals.

Privacy on Chain

Did you knew that most blockchains are public? If you make a transaction, everyone can theoretically see it, the government, a bank, or anyone who wants to see where your money is going.

They only need to connect your identity to your address and voilà every transaction you made are visible to them. In fact there are a numerous firms that are tracing blockchains like Chainalysis.

A surveillance camera
Source: Bernand Hermant on Unsplash.

In an age of mass surveillance, anonymity is becoming more important than ever. The Monero blockchain is fully private and untraceable. No one can see how much XMR you have or who you sent it to. You have full anonymity.

Crypto For the Underworld?

Isn’t these features attract certain kind of people? Well they can, but according to the statistics, only 1% of illicit activity is conducted on chain and 3–5% is with cash (source).

A hacker sitting on a chair next to a monitor
Source: Tima Miroschnichenko on Pexels.

In my option the fact that criminals can use XMR proves that it’s truly secure and untraceable. Still most people who transact XMR are just regular folks who want to stay anonymous. Their transactions, their business.

Public Enemy Number One

Cracking the algorithm

It’s no wonder government agencies are targeting Monero. The FBI, DEA and IRS all tried to crack Monero’s algorithm. Still no one has yet succeeded. If these large government funded agencies failed, I don’t think a blockchain tracing startup will.

A quote from Dr. Tom Robinson, co-founder of the one of the largest crypto compliance company:

It is unlikely that there will ever be blockchain monitoring tools that allow compliance professionals to trace monero transactions
Binary code all over a monitor
Source: Markus Spiske on Unsplash

Exchange delistings

What they can do against Monero is ban it on centralized exchanges. In fact some exchanges have already started delisting XMR.

Atomic Swaps

Fortunately for the privacy concerned, there was a recent implementation called Atomic Swaps that makes Monero exchangeable to Bitcoin without relying on a trusted third party (like Binance or any other exchange).

Blog: Bitcoin Monero atomic swaps are now live

The Cypherpunk Ideal

Monero is fully community-driven and funded, there aren’t any giant investors with deep pockets investing in it, more like a lot of committed people with shallow pockets. There isn’t a big marketing campaign running.

Monero Toolkit. Source: Wallpaperaccess

Most of it’s community is focused on the tech and the ideals behind XMR and stay away discussing the prices. The devs are actively improving Monero trying to advance the protect’s security, privacy and decentralization.

Behind the Tech

There is some interesting cryptography and technology behind Monero. If you are not interested in the geek stuff, feel free to skip to my conclusion. Here are the main features that make XMR secure, decentralized and anonym:

RandomX

Monero uses an innovative Proof-of-Work algorithm called RandomX. It is optimized for CPU mining and discourages the usage of ASICs (specialized mining hardware) to keep the mining decentralized. A transaction on chain costs 0.003$ and is fully confirmed in 20 minutes, which is very efficient for a PoW blockchain.

Monero mining. Source: Wallpaperaccess

Stealth addresses

Stealth addresses are random one time addresses for the receiver. The receiver can publish one address and have all incoming payments go to unique addresses on chain, where they cannot be linked to the published address.

Ring signatures

Ring signatures are digital signatures that can be signed by a group of possible signers to produce a signature that authorizes a transaction. The signatures are made up from the actual signer and decoy signers to hide the origin of the transaction.

Conclusion

In today’s world privacy is not respected. Those in power want to know how much money you have and where you have been spending it and with blockchain auditing firms now they have the tools to oversee blockchains.

Say hello to the camera! Source: Fransesco Ungaro on Pexels.

In certain countries, you could face serious life-threatening consequences if you purchase something that the government doesn’t like. There is an increasing need for privacy. XMR has a strong utility, especially now when regulators are coming for crypto and DeFi.Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing

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Monero: The King of Privacy was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.