Crypto

How Monero works and how it differs from Bitcoin?

The leading cryptocurrency whose behavior affects the entire digital currency market is bitcoin. Its dominance is around 60% and it marks the cycles through which this market moves. When it began to be noticed at the beginning of its existence, and investors saw opportunities in it, other cryptocurrencies were created in its wake. They tried to ultimately solve various problems and shortcomings that were noticed in the bitcoin network. As we can see, most of them ended with a poor result, and only some of them managed to break through on the market.

What problems were identified with the Bitcoin (BTC) network?

“One of the downsides of Bitcoin (BTC) that is often blamed on it is its lack of anonymity. Although the addresses between which we send our funds are difficult to assign to a specific person, we can track in detail what amounts are transferred between them, at what time, and how often the transaction takes place. ” – Said Tomasz Kabarowski, the founder of the cryptocurrency exchange office – kantorbitcoin.pl

One cryptocurrency that solves this problem is Monero (XMR). It is a cryptocurrency that was established in 2014 and operates on an open, privacy-oriented blockchain network that is based on anonymity. The blockchain network of this cryptocurrency was deliberately designed in such a way as to be opaque. Transaction details such as the identity of the sender and recipient and the number of transactions performed between them are anonymous and no one (not even the creator) has access to them.

A Monero network uses a P2P (peer-to-peer) communication model where all users of the network are equal to each other. During the launch of the network, the developers did not keep any shares for themselves and, thanks to the support of the community that gathered around the network, were able to continue further work on the project. Mining of Monero can be done on a regular computer (it will be a node in the network) and does not require special hardware such as specific integrated circuits (ASICs). It works on all leading platforms, including Windows, MacOS, Linux, Android.

Monero Network Privacy (XMR)

The Monero network has three basic mechanisms implemented to ensure complete anonymity when using its network.

Ring signatures.

The first one is ring signatures. It is a mechanism that allows the user to hide their identity from other people on the network. The signature is generated in the form of an anonymous digital signature, coming from one of the network members, but it is not visible who signed a given transaction. To generate such a signature, the network uses a combination of keys from the sender’s account and places them in public keys on the blockchain, making it unique and private. It is mathematically impossible to determine which of the keys was used to create this signature.

Hiding addresses.

All transactions on the Monero network use hidden disposable public addresses to protect recipient privacy. Once used, an address that has been saved in an open network that anyone has access to becomes invalid. The recipient can access funds sent to a hidden address without revealing any public information. Thus, when checking the record, we see only one transaction entering a given address, without any specific value that was transferred in this operation.

Hiding the transaction amount.

In most cryptocurrencies, transaction amounts are sent in plain text, visible to any observer. The confidentiality of this information is maintained in the case of Monero networks. The appropriate mechanism of cryptographic obligations means that the sender must “prove” having sufficient funds to send them in a certain amount, but there is no need to disclose it. Due to this process, it is one of the few cryptocurrencies in which it is impossible to define the “richest list” of users.

Many people value privacy and this cryptocurrency was created with such investors in mind. It allows for completely anonymous possession of funds that no one can deprive us of, because they are secured in a decentralized network on our wallet with a private key, which gives a sense of independence and security. The Monero (XMR) cryptocurrency can be purchased using the exchange office – kantorbitcoin.pl


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Amaury Reynolds

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Amaury Reynolds

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