What is Monero
Monero uses a proof of work (PoW) consensus algorithm to issue new coins and secure transactions and an obfuscated public ledger that lets anybody broadcast or send transactions without giving outside observer information about the source, amount, or destination. XMR is the open-source, decentralised cryptocurrency that powers the Monero blockchain network.
A Brief History of Monero
Monero’s roots stem from Bytecoin, the initial implementation of CryptoNote, an application layer protocol aiming at addressing concerns with Bitcoin. The main concerns they aimed to solve were traceability, mining centralisation, and irregular coin issuance. The community had overall disappointing sentiments towards the release of BitMonero though they had previously supported it, prompting seven community members to fork BitMonero into a new project named Monero. Fluffypony (Riccardo Spagni) headed this mostly anonymous group, eventually forming the first Monero Core team. Monero launched its project with no prior knowledge in April 2014.
Due to its anonymity by default characteristics, Monero has become one of the most extensively used darknet currencies globally since its inception. Monero improved its privacy features even further in 2017 by integrating Ring CT signatures, a method offered by Bitcoin Core developer Greg Maxwell that obscures transaction amounts for each element in the ring signature and the transaction address. Monero developed bulletproofs, a zero-knowledge proof method that superseded the prior zero-knowledge range proofs on which its secret transactions depended, in October 2018. Bulletproofs reduces the size of its secret transactions by at least 80%, enhancing transaction efficiency dramatically.
Monero has hard forks every six months to let it regularly develop while also giving users enough time to upgrade before being split away from the network. Patches and bug fixes, hashing algorithm tweaks, and feature enhancements are standard in these hard forks. Fluffypony (Riccardo Spagni), Monero’s lead maintainer, stepped down in December 2019 to further decentralise the project. After forking Bytecoin’s source in response to a controversial 80% pre-mine, seven engineers formed Monero with no premine or instamine.
How Monero Works
The Nitrogen Nebula software powers the Monero ecosystem, allowing untrackable transactions. The Dandelion++ Protocol relays network transactions and propagates them. A wallet, which is the primary storage technique, enables every transaction on the network. As a result, when tokens transfer from one user to another, they only appear in the recipients’ wallets.
Initiated transactions are taken care of by miners responsible for the security and validation of all network entries. The current protocol is the proof of work (PoW) model, which underpins the Bitcoin ecosystem. The PoW method is unique because it needs mathematical problems to be solved before the value is created or transferred.
What is Monero Used for
Monero is a fungible currency, making accepting Monero payments more tempting for companies than other currencies. Users can freely send and receive cryptocurrency in all transactions, making XMR fungible, secure, and untraceable. This implies that businesses cannot reject XMR because they could be engaged in objectionable activities. XMR may appeal to any user who wishes to push the frontiers of cryptography in cryptocurrencies, paving the way for money systems that enable people all over the globe to save and pay without oppression.
Monero, like other cryptocurrencies, is built on blockchain technology. Businesses may use Monero to purchase from suppliers without disclosing potentially commercially sensitive information, as they would with other currencies such as Bitcoin. Consumers may utilise Monero to prevent price discrimination while purchasing things online by concealing their financial information.
