cryptoeDucation   04 Oct, 2019   news.eBitcoinics.com   Views: 67

Monero was launched on April 2014 as a fork of Bytecoin. Bytecoin was an obscure cryptocurrency
that, while having pioneered a novel way to achieve privacy, was plagued with a shady history and an
unfair launch. As a result, the community forked the code of Bytecoin and began a long, multi-year
project of cleaning it up, documenting it, and getting the fundamental aspects of it right.

Monero focuses on providing strong privacy by default while offering optional transparency, allowing
its users to selectively disclose their transactional history to selected parties. Privacy is inherent to the
protocol and requires no additional steps (interactivity) from the user. As a result, fungibility is greatly
improved as well.

Monero's architecture provides a clear separation of the node functionality and the wallet. Originally
having just a command line wallet, which was deemed too difficult for non-technical users to use. The
second beta of Monero’s Graphical User Interface (GUI) was released in late March 2017.

Monero, Privacy and Fungibility

In Bitcoin, transactions are traceable as the transaction graph is visible in the blockchain; sender and recipient
addresses as well as transaction amounts are visible. This makes Bitcoin vulnerable to coin tainting and
susceptible to blockchain analysis, thus potentially significantly reducing its fungibility and usefulness as
digital cash (which should be indiscernible from any other coin). Various techniques have been proposed and
utilized to improve Bitcoin's privacy, however they either suffer from having to trust centralized services (coin
mixers) of dubious quality and legal status, or from requiring manual user intervention and coordination (such
as CoinJoin).

Providing privacy and fungibility by default is considered a core principle of the Monero project. Monero
obscures the transaction graph and hides transaction amounts by a combination of Ring Signatures and
Confidential Transactions, and hides user addresses via the use of Stealth Addresses.
Mobile & Light Wallets proposed by members of the community 

Monero, Ring Signatures

Monero originally used two techniques to make blockchain analysis difficult: Ring signatures and Stealth Addresses.
“A ring signature is a type of group signature that makes use of your account keys and a number of public keys (also known as outputs) pulled from the blockchain using a triangular distribution method…In a "ring" of possible signers, all ring members are equal and valid.
There is no way an outside observer can tell which of the possible signers in a signature group belongs to your account similar in function to a bank account, contains all of your sent and received transactions”

Source: https://getmonero.org/resources/moneropedia/ringsignatures.html

Ring Signatures obfuscate the transaction graph by associating each transaction input to not just one but many possible and equiprobable outputs. This number of possible outputs is called the Ring Size of the transaction. This process is constant and no manual user intervention is needed.

Monero also hides recipient addresses by using Stealth Addresses. While the recipient can always give the same address to every sender, this address is used to generate a different, one-time address to use each time a transaction is made. Thus, the recipient's address never appears on the blockchain, and transactions are unlinkable, as nobody can prove that two transactions have the same recipient.

Originally, transaction amounts were visible in Monero's blockchain. However, in January 2017 a hard fork was performed
that upgraded the Monero protocol to utilise a new scheme, Ring Confidential Transactions, that combines Ring Signatures with Gregory Maxwell's "Confidential Transactions" scheme. This evolution allowed the obfuscation of the transaction amounts as well, which means that Monero's blockchain is opaque at this point.

Monero, other distinguishing features

Monero offers a dynamic block size (one of the developers discusses their interesting approach here) and a dynamic fee
system, in effect making the system more robust by automating basic parameters of the system, as well as providing a more flexible cryptocurrency protocol. Monero transactions are an order of magnitude larger than Bitcoin's, which makes it significantly less scalable on-chain and accelerates the need for off-chain solutions such as Lightning Network or Sharding.

Here's an interesting early discussion on the topic with Satoshi Nakamoto discussing the potential of Ring Signatures
: https://bitcointalk.org/index.php?topic=770.msg9074#msg9074

We shouldn't be making the mistake of saying that we don't need increased privacy because we have nothing to hide. This is a slippery slope to saying we don't need free speech because we may have nothing to say, or the equivalent of permanently removing the shutters/blinds from our house. Fungibility and privacy are important enough topics for the cryptocurrency community. It's a tricky problem and one that involves complicated cryptographic schemes that are understood by few (so far), and are not very accessible to the average user, without a practical way to hide the complexity.

You can read more about it, and its features in more detail here : https://getmonero.org/home

All Comments (0)

No comment yet

Please login to leave a comment. Click here to Login.
Get In Touch

Copyright All Right Reserved 2016 - 2019

Designed & Developed by NICS InfoTech LTD