Created in 2014, Monero (symbol XMR) is an open source cryptocurrency renowned for its sharp focus on privacy, decentralization, and scalability. It is secure and private. So what are its key features that give Monero the aforementioned characteristics? Have a look.
Fungibility
What this basically means is that each unit of the currency can be substituted for another. Every coin has the same value and all coins are indistinguishable from one another. This is the key characteristic that sets Monero apart from other cryptocurrencies like Bitcoins where network members could refuse to accept coins which were previously used for suspicious or undesirable activities.
Ring Signatures
Monero uses the concept of ‘Ring Signatures’ to hide the identities of the users making the transactions through its network. Ring Signatures ‘mix’ a user’s account keys with the public keys. This makes it almost impossible for anyone to determine the true identity of the actual signer.
Stealth addresses
A Stealth address is a randomly generated one-time public key that prevents the recipient’s funds from being linked to their wallet. With the implementation of this feature, recipients can publish a single address but have their transactions directed towards separate, unique addresses. This makes it seemingly impossible to determine the actual destination of the transaction by anyone else except the recipient.
Opaque blockchain
Unlike the transparent and traceable nature of the blockchain used by its competitors, Monero’s main feature is its opaque blockchain that conceals the past history of the coins and owners alike, making them ‘super-anonymous’.
Ring confidential transactions mechanism
This mechanism not only conceals the identities of the parties to the transaction but also keeps the value of the transaction a secret that only they know.
The pros and cons
- The main factor that works for Monero is the super-anonymity it offers to its users.
- Transactions made on the network are largely untraceable.
- You can make your transactions with a greater sense of privacy and security than on other networks.
- On the flip side, though, the features that set it apart have also contributed to its ever-increasing use for criminal or illicit activities.
- Also for a project with such vast potential, Monero hasn’t quite found widespread acceptance, partly because it hasn’t yet been integrated with most multi-coin wallets.
All said and done, it’s hard to deny the exponential growth potential that Monero has and it would be fun to see how it goes about achieving it.