Monero (XMR) is beginning to get the recognition it deserves. While it is now the 16th biggest cryptocurrency in the world, it is still regarded as somewhat of an underdog. It is, however, continuing to expand thanks to entrenching its transaction stability and diversifying its partners. This, combined with its key values of privacy and community, means it is the hottest ticket in town when it comes to non-fiat financial investment (i.e. non-governmental money).
What started out as a disappointing endeavour known as Bitmonero back in early 2014, was quickly taken over by the tech community and subsequently became known as Monero. This community input has been one of the key strengths of the project, with over 500 members and 50 core developers contributing to its maintenance and ongoing developments, many of whom are volunteers. The spirit at the heart of this company’s endeavour has been to maintain the utmost confidentiality for its users whilst ensuring their input is recognised. Let’s explore in more detail how these factors have brought Monero to where it is today.
One of the key areas which sets Monero apart from its rivals is its levels of privacy. For many, the major appeal of cryptocurrency is the confidentiality available to them in transactions. One issue is that although most cryptos keep their user information private, the transactions they undertake are shown on the blockchain and therefore potentially traceable. With Monero there are several levels of advanced security which have proven to be hugely popular.
In 2017, they introduced a radical new development called ‘stealth addresses’. This features a ‘dual key’ system where a one time only address for the recipient comes in two forms, a scan key and a spend key. Crucially, the information kept on this dual address is available only to the sender and recipient. The result is that the information for the transaction is not available on the blockchain and therefore can’t be seen by other users or even auditors, plus it can’t be linked to previous transactions made or received by either the sender or recipient.
Ring Signature and Ring CT
Monero utlitises another layer of privacy technology, known as a ‘ring signature’. This technology is designed to work by combining the user’s signature with older and public signatures which act as decoys when making transactions. Effectively, members have keys they use as signatures and these members can agree to organize in groups to combine these keys. From an outsider perspective, when the keys are combined into a ring they are indistinguishable from one another so it is impossible to tell who made the transaction. Prior to 2017, this obscured the senders and receivers without hiding the amount. Monero then introduced Ring Confidential Transactions or RingCT that also hides the amounts of individual transactions, making it even more secure.
As we have already gathered, 2017 was a critical developmental year for Monero, and Kovri was another reason for it. Kovri created a system which is known as an I2P router (more on that later), which is written in C++ script rather than Java which makes it more compatible with Monero’s privacy focused ethos. At the time, Riccardo Spagni, lead maintainer of Monero said, “because Monero is pro-privacy as a project, we started to adopt other projects, that are not only beneficial to the monero ecosystem but beneficial to privacy lovers everywhere, and that’s where Kovri came about.”
The Kovri project, like Monero did with Bitmonero, forked away from its original development on open sourcing as it was believed this was the best way forward. In Kovri’s case it was i2pd and it is what led to I2P or the Invisible Internet Project. At first glance it is hard to see what further privacy could be added to Monero’s already formidable system but there was a gap.
Of course, the company is successful in obfuscating the destinations and amounts of transactions, but by making a transaction in the first place you are in effect instructing the network to include it on the next block and therefore leaving a trace of an IP address. This is where Kovri steps in. The IP address is something that malicious external groups can monitor on the network to try and access a user’s information. Kovri, according to one Monero user, makes it difficult if not impossible to monitor the information and therefore extract an IP address.
A major part of what makes Monero so stable is the admission of its own fallibility. Even though it is considered to be one of the frontrunners for privacy, they accept that they are far from perfect. SGP, a Monero contributor commented
“We don’t have any systems right now which are perfectly private. We need to keep getting closer and closer to that.” The transparency here shows their clear desire to improve and stay ahead of any potential threats. That stances makes sense when you look at the numerous hacks on Bitcoin, including a $40 million raid last year. This only emphasises that size doesn’t matter when it comes to cryptocurrency, it’s what you do with it that counts – and when it comes to Monero, they certainly seem to make it count. All companies could admit to not being perfect but rarely do.
Whilst some would argue that this level of privacy attracts people who want to buy things illegally on the dark web and commit other nefarious acts, in an age of ever increased surveillance and government scrutiny, the opportunity for this level of confidentiality has been warmly received. To further add to Moner’s privacy credentials, the investment website, Investopedia, considers it to be the most private cryptocurrency in the world.
A Community Venture
Monero has always prided itself on its privacy but this needs to be maintained. As mentioned, the cryptocurrency has over 500 active contributors but what’s more, they have a 180 strong quality and research team. Mostly made up of contributors, they form the backbone of why the cryptocurrency is able to have such a high bar in comparison to its rivals. They have been further buoyed by their ability to use crowdfunding to get key developers and researchers on board with a wide base willing to fund the Monero project.
The experts, drafted in through crowdfunding, work hand in hand with the other contributors and their lead developer is full of praise for their collaboration, saying: “We’ve had new contributors flock in on the regular, some of them stay for a short while, but some of them stay for a long time, and they’re working on something without getting paid. There are some contributors who have raised funds through our crowdfunding system, but the vast majority work on Monero because they enjoy it, and find it challenging and interesting, not because they think they’re going to get rich.”
The diversity which comes from having individuals like Anonimal of Kovira and Ph.D mathematician Brandon Goodell working alongside regular contributors is critical to building the broad church which is Monero. It helps build a wide ranging consensus for how to develop and explains why this cryptocurrency can maintain their edge. It also explains why users keep returning time and again.
One of the biggest commendations of Monero’s operation has been from its loyal customer base. Recognising the cryptocurrency’s strengths and transparency, the community based venture has always had its users interests at heart. This is why they allow users to put forward their opinions and decisions around the future as democratically as possible. It is also the reason the company is committed through its contributors and customers to continue to improve and work on its privacy features and keep it safe from hackers.
The two great pillars on which Monero’s diversity and stability stand are its community and its level of privacy. They mutually drive the need for improvement in the product and help maintain its decentralization. Whilst so many competitors have fallen by the wayside by getting complacent or sloppy, this cryptocurrency has continually raised the bar and set the standard for how others should operate and develop.
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