Privacy-Focused Monero Aims To Protect Personal Information
Judging from how often we read software user agreements , how we freely give away personal information online, one could conclude that most people would not be bothered about the importance of privacy. However, if you consider privacy a priority, then Monero is likely to rank high on your list of preferred cryptocurrencies.
Monero also ranked 10th by market cap with 5.79 billion dollars on coinmarketcap.com on 5th March 2018. On the same day, it was trading at a price of $ 367. This is 25.8% lower than the previous all-time high of $495. The picture is still not a gloomy one, since the price has been steadily recovering since the dip in cryptocurrency prices in January 2018. The recovery is likely fueled by the expectations of free coins, if the proposed “Monero V” hard fork of Monero is successful. Also, with about 25,956% increase in price since may 2014, the long-term holders might still be content.
How Monero Offers Privacy
Every now and then, cryptocurrency prices tend to pump for no apparent reasons. However, it is usually projects with useful innovations and sound technology that stick around and still do well in terms of adoption and price. Monero has both the innovations and sound technology. Notably, Stealth addresses, ring signatures, and ring confidential transactions are all in the Monero bag of privacy tools.
Stealth addresses are provisional addresses that are created to act as a recipient’s address when Monero’s XMR token is sent. That is to say that the actual recipient’s address would not be exposed in the blockchain history. This way, information on the receiver of a transaction is concealed.
Whiles stealth addresses hide the recipient’s address, ring Signatures hide the sender’s address. This is done by “mixing” information on funds being sent by a user with that of other funds being sent on the blockchain. This process is carried out in a manner that makes it impossible to determine which source of funds is the real one.
With ring confidential transactions being introduced in January, 2017, the exact amounts involved in transactions are obscured as well. All these processes take place without compromising the verification of transactions or prevention of double spending of coins. In the end, what we get from these tools are transactions that are completely concealed and cannot be traced. Hence, giving users complete anonymity and privacy, while making Monero truly fungible.
There is more though. Coming up is Kovri. With Kovri, Monero would be going the extra mile to provide users more security. The project is currently being developed, but promises to help detach transaction IDs from IP addresses and guard against node partitioning attacks amongst others. This layer of security is an application of the invisible internet protocol (I2P). I2P aims at facilitating the anonymous use of the internet.
Comparing Other Privacy-Focused Coins
Monero does not only provide privacy but makes it the default setting for all transactions on the network. This differentiates Monero from other privacy coins like Zcash and Dash where shielded or anonymous transactions are optional. Making anonymous transactions an option can lead to suspicion when it is opted for instead of transparent transactions. Consequently, people who seek optimum privacy are therefore more likely to choose Monero. A quintessential example is people transacting on the dark web.
Monero has other things going well for its reputation in the cryptosphere. It had no special kitty of funds set aside from the total supply of Monero, but falls on donations from the community in order to make new developments. Even though such funds help new cryptocurrencies with marketing and paying developers, they tend to be frowned upon in the cryptocurrency space.
The number of developers working on the Monero platform is another plus. In fact, it comes third on coingecko’s developer score list. Only Bitcoin and Ethereum rank higher in this regard. Having more quality developers working on a project augers well for its reputation.
Everyone Can Mine Monero, Including Those Who’re Unaware
The technologies employed on Monero are mostly from the cryptonote technology from which monero originated. Cryptonote focuses on innovative features for anonymous cryptocurrencies. Lots of research goes into the development of the various cryptonote technologies. The cryptonight proof of work mining algorithm is one such innovation.
This mining algorithm, which is used to mine Monero, makes it practical and profitable to use normal personal computers for mining by not giving specialized mining chips any advantage. This is a way of keeping mining decentralized. However, there is also the viewpoint that specialized mining chips called application-specific integrated circuit (ASIC) miners would eventually become necessary when a cryptocurrency gains more adoption and requires greater mining power.
The fact that the cryptonight mining algorithm denies ASIC miners an advantage coupled with the anonymous nature of Monero creates the problem of cryptojacking. Hackers covertly use website user’s computers to mine monero. Core media reports on one such occurrence here.
Upcoming Hard Fork
As mentioned earlier, Monero’s recovery being better than most cryptocurrencies after the January 2017 crash could be attributed to Monero V. Monero V is an upcoming hard fork of the crypto-platform that promises to place a limit on the total supply of coins and come out with solutions to help the network handle more transactions. According to the Monero V roadmap document, there would be a limit of 256 million coins instead of the infinite number of coins planned for Monero.
The news on this upcoming hard fork which is slated for 14th March, 2018 was not welcomed by all in the Monero community. Many have called it a scam coin and warned users to be careful.
One cannot be careful enough in cryptoland. Being aware of the need for privacy and taking actions to protect our privacy is a good way of threading cautiously in this space. Monero definitely helps with that.