When Monero (XMR) appeared in 2014, it was the first cryptocurrency to feature cryptographical advances over its peers and centered itself around privacy and fungibility. The very primary feature Monero offered was that it allowed its users to send and receive transactions without making the data available to anyone examining the blockchain – It does away with the transparency of other cryptocurrencies.
Monero is often grouped with other privacy-focused cryptocurrencies, such as Zcash (ZEC). Both have sought to address privacy weaknesses in Bitcoin, such as the transparency of its blockchain.
Though the launch of the Zcash project enjoyed media attention and backing from privacy VCs, Monero’s genesis is more similar to Bitcoin, as a small online tech community that grew quietly over time.
Other than its lack of transparency and absolute privacy, Monero boasts other features.
Monero is designed to update every six months, allowing a regular schedule to add features.
This has led Monero to add many privacy features since its inception.
What Privacy Features Does Monero Have?
During its busy development cycle, Monero has added a number of extra features:
The technology that makes this obfuscation possible, Monero uses Ring Signatures to mix the digital signature of the individual making an XMR transaction with the signatures of other users before recording it on the blockchain. This way, should you look at the data, it would appear as if the transaction was sent by any one of the signers.
Over the years, Monero has experimented with altering the number of signatures involved in this mixing process, at one time even allowing users to specify the desired number.
As of 2019, however, a default monero transaction is now set, adding 10 signatures to every transaction group and mixing 11 signatures in total.
Yet another feature contributing to Monero’s privacy is Stealth Addresses, which enables users to publish one address that automatically creates many one-time accounts for every transaction.
Using a secret “view key,” the owner can then identify their incoming funds as their wallet can scan the blockchain to identify any transactions with that key.
Introduced in 2017, Ring Confidential Transactions hide the amount users exchange in transactions recorded on the blockchain. In effect, RingCT makes it so transactions can have many inputs and outputs, while preserving anonymity and protecting against double spends.
The Genesis of Monero
The creation of Monero was shrouded in mystery, unknown developers contributors, accusations of fraud, and many rebrandings.
In 2013, developer Nicolas van Saberhagen authored the CryptoNote white paper. The paper put forward the need for cryptography within the cryptocurrency community and was referenced by renowned Bitcoin developers Gregory Maxwell and Andrew Poelstra in their own work.
The white paper initially didn’t provide enough for some to create a cryptocurrency from, but eventually, a cryptocurrency did arise from its page – Bytecoin. Bytecoin collapsed under allegations its developers were tampering with the supply.
Those of the Bytecoin team with had escaped allegation formed ‘Bitmonero’ in 2014. Following further allegations, another and final fork was formed, named Monero, which is the one we are left with today. Monero is the Esperanto word for ‘Coin’.
Cybercrime and Monero
Given its complete privacy, many in law enforcement and government see Monero as the cryptocurrency choice for cybercriminals.
Though Bitcoin still dominates the ransomware-payments world, there has been a noticeable increase in hackers demanding Monero instead.
This is especially the case since last year’s Colonial Pipeline attack, carried out by the Darkside Ransomware gang. The FBI were easily able to trace the money back to the gang after breaching the wallet.
“The more savvy criminals are using Monero,” said Rick Holland, chief information security officer at Digital Shadows, a cyberthreat intelligence company.
“We’ve seen REvil…give discounts or request payments in monero, just in the past couple months”
“It’s almost like we’re seeing, at least from a cyber criminal perspective, a resurgence…in monero, because it has inherently more privacy than some of the other coins out there,” Holland said of monero’s recent rise in popularity among actors in the ransomware space.
Protecting Your Cryptocurrency
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