Privacy is a core value in the blockchain space.
Monero – a privacy-centric cryptocurrency – was the first of its kind. It was born from the blockchain project “CryptoNote”, where the dispute ensued between the founder and several core community members over future privacy plans.
CryptoNote was forked, and a majority of users migrated along with the core community members to create a new and advanced privacy blockchain.
It was called Monero, and launched in April 2014. Monero uses a Proof-of-Work consensus mechanism.
Privacy
For a blockchain to be a privacy-centric network, it must be void of any centralized control, and the network should be systematically automated. In doing so, it should also NOT disclose transaction details publicly, or make them accessible at all. This is a complex puzzle to solve and execute, but Monero is the unison harmony of all these combined.
Ever since its fork from CryptoNote and launch as Monero, the privacy token underwent two crucial structural changes:
1. The database layout & code was changed in response to a higher demand of users. This change provided an efficient and stable network.
2. Another important change came in January 2017, when the RingCT function was planted In Monero. RingCT is what hides transaction amounts. It does this by matching input and output data, so the transaction is realised and completed through recognition of its digital signature on the blockchain, but maintains an undisclosed amount of cryptocurrency.
After these changes, every action on the Monero blockchain became untraceable. This is accredited to three systems that operate inside of the Monero blockchain: RingCT (which was previously mentioned above) Stealth Addresses, and Ring Signatures.
Stealth Address – a Stealth Address is a unique 95-digit code that is created by the sender for one-time use ONLY. The 95-digit code must contain the recipent’s address. Monero’s blockchain algorithm scrambles the code so that no address is recognizable or traceable publicly, but the participants in the transaction are able to verify the execution and success of said transaction. The wallet key scans the transactions on the blockchain until it finds and then matches the transaction containing the scrambled one-time wallet address.
As the transaction is one-time, it cannot be linked back to the source of funds.
Ring Signature – This is deployment on the Monero blockchain that bundles personal account keys with a random number of public keys. It serves a similar purpose to RingCT but instead it makes account keys untraceable.
This could include past transactions, current transactions, or invalidated transactions.
However, this is not repeating or duplicating a transaction, but rather like showing a receipt for the transaction since the one-time code has been activated and completed. Instead, this is to create a ring of possible signers (active wallet keys or addresses) involved in a bundled transaction. All entries into the ring transaction are processed as if they were live transactions, which hides and disguises the amount sent for each individual transaction, recipient addresses, or even what the transaction contained. The blockchain scans previous blocks to validate the real transactions and dismiss already-fulfilled transactions.
On top of these impressive systems that maintain Monero’s impenetrable status, the blockchain continues to progress its technology.
The blockchain has created transactions over Tor/12P, which is a method of connecting your wallet to your own private encryption and authentication node linked to the Monero blockchain.
Dandelion++ is another – a coded mechanism that erases the connection between a unique wallet and its correlated IP address.
Getting started with Monero
First thing is first, make sure Monero is legal in your respective country before attempting to use it.
To access the Monero blockchain, the first thing you must do is connect your wallet. Here is what Monero supports:
Monero GUI
Monero CLI
MyMonero
Ledger hard wallet
Trezor hard wallet
Edge
Feather
Cake Wallet
Monerujo
You can also import a compatible blockchain.
After this, all that is required is to buy some Monero (XMR) either through a wallet or an exchange.
Fun Fact: The IRS offered a $625,000 USD reward to anyone that could hack/decode Monero’s blockchain records. This was in 2020, and the blockchain is yet to have one breach of any kind.
