Monero (XMR): A Privacy and Security Oriented Crytocurrency

Monero (XMR) is a privacy-oriented cryptocurrency that aims to keep all transactions on its blockchain private from others. It does this in two ways, stealth addresses, and ring-CT. Monero uses the CryptoNote algorithm, first used in the now infamous ByteCoin. CryptoNote is an ASIC resistant algorithm, intending to make mining long-term feasible on consumer computers, thus helping to decentralize the network. GPUs still have somewhat of an advantage, but the gap is nowhere near that in Scrypt (Litecoin) or SHA256 (Bitcoin) coins.

Mining

Any computer can mine Monero, though the newer the better. Older CPUs may not have the required AES instruction set. There are various options for mining software, including the infamous CoinHive javascript based miner. XMR-Stak is recommended by the community for simultaneous mining on a CPU and one or more GPUs. Please note that the mining software MinerGate is a scam, it lies about your current hash rate, thereby skimming your profits. You can find a list of other scams on the Monero subreddit

ASIC Resistance

Monero’s algorithm, CryptoNote, is ASIC (Application Specific Integrated Circut) resistant, this is due to its use of large amounts of processor cache. Cache is expensive to manufacture compared to other parts of an integrated circuit, making developing an ASIC to mine CrytoNote difficult. Monero also has a bi-annually scheduled hard fork that could be used to change the algorithm, thereby staying ahead of  ASIC designers.

Scheduled hard forks

The developers of Monero execute a bi-annual hard fork. Changes to the algorithm and other internal parts of the cryptocurrency require hard forks. The next hard fork is scheduled for sometime in March 2018, the exact date will be decided later in the year.

Privacy and security

Monero users have always-on privacy – Transactions that are not private cannot be sent over the blockchain. When sending a transaction on the Monero blockchain, a ring signature is created that hides the true transaction in a list of others. All of them using stealth addresses to hide the target of the transaction. The only available information on the blockchain is that a transaction happened. The sender can decrypt the transaction using the transaction key and the target address, either with the GUI wallet or an online tool such as xmrchain or other block explorers. Though this does require you sharing your private keys for that transaction with the block explorer service.

There are only two ways to view the balance of a Monero address; owning the address or getting a view key from the owner of the address. A view key allows anyone to view the content of a Monero address without being able to spend said contents.

Wallets

Currently, the recommended desktop wallet is the official wallet, which supports both running a local node and connecting to a remote one. The MyMonero wallet is another, more convenient option, though you sacrifice some privacy for convenience, as your private keys are stored on MyMonero’s servers. This means that you must trust MyMonero with your money.

Armin Davis

Armin is a cryptocurrency mining and computer security enthusiast. Writing is fun too.

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