Let’s continue with the next coin in our Altcoin Report Series: Monero. But first some great news! You can start to mine Monero beginning today!
What is Monero?
Monero is an open-source cryptocurrency with a focus on user privacy and scalability. It was released in April 2014 and is currently gaining popularity because of the innovative way it handles transactions on the blockchain. It is among the most popular cryptocurrencies.
Its source code is not forked from the Bitcoin project, but rather a complete rewrite of a blockchain coin architecture with scalable blocksizes already implemented.
Monero implements exciting new technology directly from the CryptoNote protocol implementation. The CryptoNote Whitepaper was released in fall of 2013 and focuses on transactional privacy. Transactions in Monero are processed through the use of cutting-edge cryptographic ring signatures, which are obfuscating the origin and size of the value being transferred by mixing in other transactions. This ensures that purchases, receipts, and other transfers remain private by default. As a result, it is extremely unlikely that a transaction could be linked to a particular user.
It is not possible to look up a Monero address balance on the blockchain. When a transaction is made a one-time address is derived from the Monero address and funds are sent to this address. The owner of the Monero address can control all his/her one time addresses at a later point in time.
Quote by moneromooo, Monero developer:
“Think of it this way. You have a large ground (the blockchain), with remote controlled cars (transactions) racing. There are people around the area, controlling the cars. But you don’t know who controls what car(s).”
Ring Confidential Transactions
An upcoming update to the Monero codebase from the Monero Research Lab is going to include a new feature called “Confidential Transactions” which will completely hide the sender, receiver and transaction value. The Monero team used the code written by Gregory Maxwell for the Elements sidechain project and adjusted it for the usage of ring signatures. The hardfork implementing Ring Confidential Transactions will likely happen towards the end of this year.
An important point to understand is that with Monero, privacy is built into the protocol itself and doesn’t have to be managed by the user.
Quote by fluffypony, Monero core team member:
“The next step is for us to continue enhancing Monero’s scalability, usability, and privacy – which is precisely what we’re doing with things like RingCT, which will completely mask even the amounts that are involved in a transaction.”
Average block time between two blocks is 2 minutes. Mining will issue around 18.4 million coins in the first 8 years and afterward, a “tail emission” will issue sub-1% inflation to create a miner incentive.
Monero features a dynamic block size which is derived from the median of previous blocks. Once a spike in transactions happens, the block size will automatically adjust to include all transactions into blocks within a reasonable timeframe.
MyMonero offers a web-wallet which lets users store and send Monero without the need to use the console wallet application Just make sure you back up your seed phrase before sending money into the wallet. It offers essential features like Overview, Send, and Recieve and comes with a slick user interface.
There are several Monero GUI wallets in the works, with announcements of upcoming implementations of Monero in the Jaxx mobile wallet, as well as the Exodusmulti-OS desktop wallet. There is also an ongoing discussion about an implementation into a hardware wallet.
Stay tuned for our next report!
If you’d like to start mining Monero you can do so here!