Monero (cryptocurrency)

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Monero (cryptocurrency)
252px
Monero Logo
ISO 4217 code XMR
Date of introduction 18 April 2014; 4 years ago (2014-04-18)
User(s) Worldwide
Inflation Slowly decreasing block reward that levels out at a minimum of 157788 XMR annually. This is less than 1% annual inflation, tending towards 0%.
Symbol ɱ
Plural Monero, moneroj

Monero (XMR) is an open source cryptocurrency created in April 2014 that is focused on privacy, decentralisation and scalability. Unlike many cryptocurrencies that are derivatives of Bitcoin, Monero is based on the CryptoNote protocol and possesses significant algorithmic differences relating to blockchain obfuscation.[1] Monero has ongoing support from the community,[2] and its modular code architecture has been praised by Wladimir J. van der Laan, the Bitcoin Core maintainer.[3] Monero currently carries a market capitalization of over $14 million.[4]

History

Monero was launched on 18 April 2014 originally under the name BitMonero, which is a compound of Bit (as in Bitcoin) and Monero (literally meaning coin in Esperanto). Five days later the community opted for the name to be shortened just to Monero. It was launched as the first fork of CryptoNote-based currency Bytecoin, however was released with two major differences. Firstly, the target block time was decreased from 120 to 60 seconds, and secondly, the emission speed was decelerated by 50%. In addition, the Monero developers found numerous incidents of poor quality code that was subsequently cleaned and re-constituted.[citation needed]

A few weeks after launch, an optimized GPU miner for CryptoNight proof-of-work function was developed.[5]

On 4 September 2014, Monero recovered from an unusual and novel attack executed against the cryptocurrency network.[6]

Features

File:Monero coin supply and inflation over time.png
Monero coin supply and inflation over time.

Monero is an open-source pure proof-of-work cryptocurrency. It runs on Windows, Mac, Linux and FreeBSD.[7]

Its main emission curve will issue about 18.4 million coins to be mined in approximately 8 years.[8] After that, a "tail emission" will create a sub-1% perpetual inflation to prevent the lack of incentives for miners once a currency is not mineable anymore.[9] The emission uses a smoothly decreasing reward with no block halving (any block generates a bit less moneroj than the previous one). The proof-of-work algorithm, CryptoNight, is AES-intensive and "memory heavy", which significantly reduces the advantage of GPU over CPU.

Privacy

The changes in the results of blockchain analysis after implementing the ring signatures.

Monero daemon uses the original CryptoNote protocol except for the initial changes (as the block time and emission speed). The protocol itself is based on "one-time ring signatures"[10] and stealth addresses. Underlying cryptography is essentially Daniel J. Bernstein's library for Ed25519, which is Schnorr signatures on the Twisted Edwards curve. The end result is passive, decentralised mixing based on heavily-tested algorithms.[11]

However, several improvements were suggested by Monero Research Labs (a group of people, including core developers team), which covered the proper use of ring signatures for better privacy.[12] Specifically, the proposals included "a protocol-level network-wide minimum mix-in policy of n = 2 foreign outputs per ring signature", "a nonuniform transaction output selection method for ring generation" and "a torrent-style method of sending Monero output".[13] These changes, which were implemented in version 0.9.0 "Hydrogen Helix",[14] can help protect user's privacy in a CryptoNote-based currency according to the authors.

As a consequence, Monero features an opaque blockchain (with an explicit allowance system called the viewkey), in sharp contrast with transparent blockchain used by any other cryptocurrency not based on CryptoNote. Thus, Monero is said to be "private, optionally transparent". On top of very strong privacy by default, such a system permits net neutrality on the blockchain (miners cannot become censors, since they do not know where the transaction goes or what it contains) while still permitting auditing when desired (for instance, tax audit or public display of the finances of an NGO).[15]

Monero developers are also working on implementing a C++ i2p router straight in the code. This would complete the privacy chain by also hiding the IP addresses.[16]

Decentralisation

The smart mining forthcoming feature will allow transparent CPU mining on the user's computer, far from the de facto centralization of mining farms and pool mining, pursuing Satoshi Nakamoto's original vision of a true p2p currency.[17]

Scalability

Monero has no hardcoded limit, which means it doesn't have a 1 MB block size limitation preventing scalability.

The Monero Core Team also released a standard called OpenAlias,[18] which permits much more human-readable addresses and "squares" the Zooko's triangle. OpenAlias can be used for any cryptocurrency and is already implemented in Monero, Bitcoin (in latest Electrum versions) and HyperStake, as well as several websites such as mymonero.com and coin.space.

Usage

XMR.TO allows you to make a payment to any Bitcoin address with the strong privacy provided by Monero.[19]

Limitations

Since it is not based on Bitcoin, Monero cannot take advantage of the Bitcoin technological ecosystem, like GUI wallet or payment processors. As a consequence, everything has to be written from scratch.[20] Presently (as of March 2015), Monero doesn't have feature parity with Bitcoin. Notably, there is no support to multisignature and no Monero payment processor (but in April 2015 it was announced on bitcointalk.org one is in the works by a member of The Monero Core Team).

Ongoing work and side projects

  • RingCT: a way to implement confidential transactions in Monero. Confidential transactions (CT) is a proposed method for hiding the value of transactions in Bitcoin.[21]
  • MoneroX: a .Net based GUI wallet software offers sending/receiving coins functionality. MoneroX uses RPC connection to network nodes and provides interface that looks like traditional Bitcoin-Qt client;
  • OpenAlias: an extensive aliasing blockchain-based system;[22]
  • Partially funded Privacy Solution for integrating I2P in Monero;[23]
  • URS: the proof-of-concept of an anonymous voting system, based on ring signatures;
  • Electrum's mnemonic seeds for deterministic key creation in webwallet;[24]
  • The Monero Core Team continues to depart from the original Bytecoin code with numerous patches and improvements to its implementation of the Cryptonote protocol.[25]

Applications

CryptoKingdom is a MMORPG that uses Monero for entry into its economy.[26]

MoneroDice is a dice gambling game that uses cryptography for provably fair randomness.[27]

See also

References

  1. "Nope. You are confused. You should consider this great news because you are abou... | Hacker News". news.ycombinator.com. Retrieved 2015-10-04. 
  2. "Monero (XMR) CoinGecko Community Statistics". www.coingecko.com. Retrieved 29 September 2015. 
  3. "Wladimir J. van der Laan". http://bitcoin-development.narkive.com/. Retrieved 29 September 2015.  External link in |website= (help)
  4. "Monero (XMR) Market Capitalization". www.coinmarketcap.com. Retrieved 5 March 2016. 
  5. Andersen, David. "Minting Money with Monero ... and CPU vector intrinsics". da-data.blogspot.ru. Retrieved 30 March 2015. 
  6. Macheta, Jan; Noether, Surae; Noether, Sarang; Smooth, Javier. "Counterfeiting via Merkle Tree Exploits within Virtual Currencies Employing the CryptoNote Protocol" (PDF). getmonero.org. Retrieved 4 April 2015. 
  7. Latapie, David. "What's so special about Monero". Getmonero.org. Retrieved 19 March 2015. 
  8. "Monero Economy". bitcointa.lk. Retrieved 4 April 2015. 
  9. Hutchinson, Martin. "Breakingviews: Bitcoin's defects will hasten its demise in 2015". reuters.com. Retrieved 19 March 2015. 
  10. Saberhagen, Nicolas. "CryptoNote" (PDF). cryptonote.org. Retrieved 5 October 2015. 
  11. Spagni, Riccardo. "Alright devs, own up: what's the deal with "magic" block 202612?". Reddit. Retrieved 29 March 2015. Based on our current level of technology and our current understanding of cryptography there is no vulnerability in ring signatures, not in theory nor in our implementation (which is mostly based on old, exceedingly well-tested cryptography and code from SUPERCOP / libsodium / NaCL). The cryptography is directly based on work that is nearly 10 years old, which in turn is grounded in cryptography in a paper from 1991, so we're talking about something that has already been analysed by very gifted cryptographers. 
  12. "Monero Research Labs". getmonero.org. Monero. Retrieved 31 March 2015. 
  13. Mackenzie, Adam; Noether, Surae; Monero Core Team. "Improving Obfuscation in the CryptoNote Protocol" (PDF). getmonero.org. Retrieved 31 March 2015. 
  14. https://getmonero.org/2016/01/01/monero-0.9.0-hydrogen-helix-released.html
  15. Latapie, David. "March FinTech Open Mic Night - Monero". youtube.com. Retrieved 4 April 2015. 
  16. Latapie, David. "Why we chose i2p over TOR". getmonero.org. Retrieved 19 March 2015. 
  17. "Bitcoin whitepaper". Retrieved 5 April 2015. 
  18. "OpenAlias official website". openalias.org. Retrieved 19 March 2015. 
  19. "What is XMR.TO?". xmr.to. Retrieved 5 April 2015. 
  20. Latapie, David. "Why is the official GUI wallet not released yet". getmonero.org. Retrieved 19 March 2015. 
  21. http://eprint.iacr.org/eprint-bin/getfile.pl?entry=2015/1098&version=20151217:200440&file=1098.pdf
  22. "OpenAlias official website". getmonero.org. Retrieved 30 March 2015. 
  23. "The-Privacy Solutions Project". geti2p.net. Retrieved 30 March 2015. 
  24. "MyMonero". mymonero.com. Retrieved 30 March 2015. 
  25. "Github - monero-project". github.com. Retrieved 4 April 2015. 
  26. https://cryptokingdom.me
  27. https://monerodice.net/

External links