Last Updated: 13 August 2022
Monero is a veteran in the crypto world. Since 2014, the project has been going all out to ensure privacy in crypto transactions, and they do so through their own coin XMR. Despite the fact that the coin has been around for 8 years, Monero’s popularity remains undiminished. The price has even risen by 5%, because a major update is scheduled today.
Time for a deep dive!
Monero price rises 5%
The highest value of XMR ever measured is 455 euros and was achieved at the end of the 2017/2018 bull run. The current Monero price, at 162 euros, does not come close to this yet. But with a growth of 5% over the past 24 hours, it is one of the best performing cryptocurrencies.
Today Monero network upgrade
The Monero network is getting a hard fork today on block 2,688,888. One of the additions is the long-awaited View Tags, which will reduce the sync time of wallets by 30-40 percent.
As Monero explains, “This tag reveals no information about the transaction to external viewers, adds only 1-byte (a negligible amount) to transaction sizes, and yet allows us to reduce sync times by 40%+ by reducing the complex verifications required!”
Please be aware that due to delays related to important multi-sig security and bug fixes, combined with hardware-wallet-related delays, the #Monero network upgrade has been postponed until the ~13th of August:https://t.co/9NKlGtqXAn
— Monero (XMR) (@monero) July 1, 2022
Monero hides sender, receiver and amount
XMR, Monero’s coin, is a so-called privacy coin. Such a term suggests that only the coin, itself, guarantees privacy, but it is more than that. Like Bitcoin, Monero encompasses an entire payment network (blockchain), and the crypto is just a part of it.
In a private transaction, the sender, receiver and sometimes the amount transferred are hidden on the public blockchain.
Monero is known as the first payment platform where transactions cannot be traced. They use a Proof-of-Work blockchain that hosts the XMR token, where the sender, receiver and amount are completely hidden from curious third parties.
There are three components to achieving privacy on Monero:
- Ring Signatures: protect the identity of the sender
- Stealth Addresses: protect the identity of the receiver
- RingCT: protects the transaction identity
Ring Signatures, Stealth Addresses and RingCT
At the beginning of a transaction, the sender creates a random one-time address or stealth address on behalf of the recipient. The stealth address cannot be linked to the recipient’s public address or any other transaction address. Only the sender and recipient can trace where the payment was sent to.
Ring Signatures are a type of digital signature where a group of possible signatories are brought together to approve the transaction. When initiating the transaction, the signature of the actual sender is combined with a pool of non-signatories to form a separate ring.
The non-signatories are drawn from previous transaction outputs on the blockchain. As a result, a third party cannot tell who the original sender of the transaction was.
Finally, the RingCT (Ring Confidential Transactions) hides the actual amount of the transaction from all third parties while still allowing them to verify that no XMR was created out of thin air.
Monero and illicit funds
Monero was launched in early 2014 and quickly gained a reputation as the leading protocol for private transactions. This immediately made Monero popular with a certain target group offering illegal funds and services. XMR, according to this target group, is ideally suited for buying something where the amount cannot be traced back to the buyer or seller.
Monero is digital cash
But the use-case for privacycoins does not only focus on illegality. You could also see XMR as a digital version of cash. The transactions and amounts remain private and cannot be traced, just like giving a five-dollar note to your brother. That is nobody’s business.
Suppose governments and central banks switch completely to CBDCs and cash is removed from circulation, Monero can jump into this hole. Because of the characteristics of XRM, the coin is labelled as a digital variant of cash.