What is Monero?

What​ ​is​ ​Monero?

Monero attempts to address several of the deficiencies of Bitcoin. A fully anonymous electronic cash model must satisfy the following in order to comply with the requirements. Bitcoin does not satisfy the untraceability requirement. Since all the transactions that take place between the network’s participants are public, any transaction can be unambiguously traced to a unique origin and final recipient. Even if two participants exchange funds in an indirect way, a properly engineered path-finding method will reveal the origin and final recipient. Bitcoin’s failure to satisfy the two properties outlined above lead the developers of Monero to conclude that it is not an anonymous but a pseudo-anonymous electronic cash system. Monero attempts to satisfy both untraceability and unlinkability conditions.

An important feature of Monero is its autonomy: the sender is not required to cooperate with other users or a trusted third party to make his transactions

The​ ​Cryptocurrency

The transaction structure remains similar to the structure in Bitcoin: every user can choose several independent incoming payments (transactions outputs), sign them with the corresponding private keys and send them to different destinations. Contrary to Bitcoin’s model, where a user possesses unique private and public key, in the proposed model a sender generates a one-time public key based on the recipient’s address a some random data. In this sense, an incoming transaction for the same recipient is sent to a one-time public key (not directly to a unique address) and only the recipient can recover the corresponding private part to redeem his funds (using his unique private key). The recipient can spend the funds using a ring signature, keeping his ownership and actual spending anonymous.

The destination of each Monero transaction (by default) is a public key, derived from recipient’s address and sender’s random data. The main advantage against Bitcoin is that every destination key is unique by default (unless the sender uses the same data for each of his transactions to the same recipient). Hence, there is no such issue as “address reuse” by design and no observer can determine if any transactions were sent to a specific address or link two addresses together.

Timeline

October 17, 2013: The CryptoNote whitepaper, the backbone of Monero, is released September 2014: Monero recovers from an unusual and novel attack against its network January 10, 2017: The privacy of Monero transactions were further strengthened by the adoption of Bitcoin Core developer Gregory Maxwell's algorithm Confidential Transactions, hiding the amounts being transacted