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A complete guide to Monero. Why its safe and best wallets

Monero is a secure, private and untraceable virtual currency which is open source and accessible to everyone. With the crypto-coin, you are your bank. You are the only person who is responsible and in control of your funds as your transactions and accounts are kept private from prying eyes.

The coin doesn’t use the concept of pre-mining or ICOs, and this makes it a trustable currency that is backed by market forces.

The Genesis of Monero

No one owns Monero. It came to existence in April 2014 after a split from Bytecoin after allegations of over 80% of Bytecoins already published.

The coin was founded by Riccardo Spagni alongside 6 other developers, 5 of whom have decided to remain anonymous till date.

Monero is a community project therefore, it has a large team of engineers and researchers contributing to the coding and development of the platform. The coin’s platform boats of over 30 core developers, but more than 240 have contributed to the code.

After the launch of Monero, the community didn’t agree with the founder’s controversial ideas. This prompted a new team to take over, and it has been providing oversight since then.

Over the years, Monero has migrated its blockchain to another database structure which has helped improve flexibility and efficiency.

The developers set minimum ring signatures sizes, and this helped make all transactions private. Also, RingCT has been recently introduced. With this, transaction amounts can be shielded from outside parties.

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Since launch, every improvement made on the platform has made Monero easier to use. Something that has also enhanced security and privacy.

Monero security features

Untraceability through Ring Signature

Ring signatures are digital signatures that can be performed by any member of the ring or group. By default, these types of signatures are applicable on the blockchain as they enable transactions mixing.

What this means is that, when a transaction is sent, it goes as a bunch of randomly picked ring signed transactions of the same amount. However, only one is the actual sender even though all can be eligible to send.

So, any incoming transaction comes as a group of transactions with many possible senders. Also, each sender has the chance of being the real sender. Consequently, this maintains the sender’s privacy.

To make it more practical, John signs a check meant for Peter. If Peter is to take this check to the bank, a teller who knows John’s signature can easily link the check bank to John.

Now let’s assume John before giving the check to Peter got 3 other people to sign the check with him. This situation, we will have a new signature which is not similar to that of John or the other 3 signatories.

If the same teller was to receive the check, he or she might find it hard to link the check back to John.

Unlinkability Through Stealth Addresses

Stealth addresses maintain the privacy of the recipient. They don’t allow a third party to see any transactions that are done in and out of the address on the blockchain.

When a transaction is done on the Monero network, the public address of the receiver isn’t displayed on the blockchain. Instead, the stealth address creates a new one-time destination address that is not linked to the receiver’s public address.

Also, irreversible cryptographic math ensures that there is unlinkability between the public and the stealth address.

For example, if John was to send 10 Monero to Peter, his wallet address won’t be the recipient of the Monero. Instead, a new public key which is only going to be used once will be generated and that address will be the recipient of the Monero.

This will then link to Peter’s wallet without exposing the address of Peter and he will receive his 10 Monero.

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RING CT offers transactional privacy

Ring CT stands for ring confidential transactions and it was implemented on January 2017. Ring confidential transactions hide the amount that has been transacted on the Monero blockchain.

Prior to the implementation of ring CT, each Monero was divided into 3. That is, if John was to send 12.5 Monero to Peter, the transaction will be divided between 3 separate rings of 10, 2 and 0.5. With this split, there will be 3 different signatures making the sender anonymous.

While this was good because it insured that there were enough ring members making the sender anonymous, it was not totally private because it made it possible for external parties to see the transaction amount.

However, with Ring CT, this transaction doesn’t need to be sent to 3 rings. With this upgrade, the wallet of the sender randomly chooses a ring member from the pool which helps increase privacy.

Then after, the transaction will be divided into input and output. For example, if John had 12.5 Monero and wanted to send Peter 2.5 Monero, the 2.5 Monero designated for Peter will be sent alongside 10 Monero which will then go back to Peter as change.

Obfuscation Of IP Using Kovari

We have seen how with the use of Stealth addresses, the recipient’s identity can remain anonymous and with Ring CT, the amount sent between John and Peter can be hidden from the outside world. However, is that still enough to hide the identity of John and Peter? Absolutely not.

With the use of the IP addresses of John and Peter, the transaction can still be pointed back to them.

This is where Kovari comes in. Kovari is an open source tech that hides the IP address when one is transacting Monero. It uses the routing techniques and encryption to hide the IP address of the participants. It also protects the geographical location of transactions by creating a new layer over the internet.

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Monero Vs Bitcoin

The biggest advantage Monero has over Bitcoin the fact that it is entirely fungible.

This all boils down to privacy. Bitcoin, for example, can be tracked and trace. Both the parties involved in a transaction and the amount involved including what each Bitcoin was used to purchase can be easily seen on the blockchain.

This makes it possible for Bitcoins involved in illegal activities getting tainted. When coins get tainted, it almost impossible to use those coins even if the recipient of the coin was not involve in the illegal activity that led to the coin being tainted.

Monero on the other is designed in such a way that the coins cannot be tainted due to their private nature which makes it impossible to see which coins were involved in the activities considered to be illegal. This makes Monero fungible.

Pros and cons of Monero

Pros

  • Top privacy nature
  • Transactions are not traceable
  • Amounts transacted remain unknown
  • It has a strong development team
  • Adaptive block size limit

Con

  • The biggest set back of this wallet is the fact that though it’s based on ASIC mining, 43% of mining is controlled by 3 mining pools.
Where to Buy Monero

Monero is one of the most popular cryptocurrencies and can be purchased from pretty much any cryptocurrency exchange. However, here is our pick for best exchanges to buy Monero from;

Binance

Binance is one of the largest cryptocurrencies in terms of trading volume. The exchange has been offering support fro Monero since it’s launch in 2017.

Before buying Monero on Binance, bear in mind that it is a crypto to crypto exchange. This means that if you were to buy Monero from the exchange, you will have to first convert your fiat into Bitcoin or Ethereum via another exchange such as Coinbase.

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Bitfinex

This is a Hong Kong-based company launched since 2014. It offers more than 30 cryptocurrency pairs including options for USD, EUR, BTC and ETH.

Its fiat option makes it stand out from other exchanges such as Binance which are limited to crypto to crypto. They also have a mobile app for both Android and IOS.

Other exchanges

  • Cryptopia. Supported pairs XMR/USDT, XMR/LTC, XMR/BTC, XMR/DOGE
  • Poloniex. Supported pairs XMR/BTC, XMR/ETH
  • Livecoin. Supported pairs XMR/BTC, XMR/USDT
  • LiteBit. Supported pairs (XMR/EUR)
  • Moneroforcash. Supported pairs XMR/BTC, XMR/ETH
  • Bittrex. Supported pairs XMR/BTC, XMR/USDT, XMR/ETH
Best wallets for Monero

Even though Monero is one of the most popular and best cryptocurrencies, it is not supported by TREZOR, one of the most secure wallets. It was till recently that the coin was supported by Ledger, another hardware wallet popular for its high-security standards.

Nevertheless, Monero is supported by many other popular wallets among which include;

Monero GUI wallet

This is Monero’s official desktop wallet available on Windows, Mac, Linux and other operating systems.

It is also a full node wallet, making it synchronizing and the downloading process faster than most other wallets.

MyMonero

This is also another top Monero wallet managed by one of its core team members, Ricardo.

It was started through seed funding provided by Risto Pietila along with operational funding provided by Riccardo Spagni, who collectively own MyMonero.

Ledger Nano S

As already outlined above, the Ledger is one of the most secure hardware wallets because it is offline. It is like a USB and can be plugged directly into a device such as a PC’s USB port.

It also provides the option of a 2-factor authentication, secure pin and seed recovering accessibility.

The wallet currently supports over 40 cryptocurrencies including Bitcoin, Ethereum and XRP.

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In conclusion, Monero is the best cryptocurrency for people who are in search of additional privacy in their crypto transactions. It ensures that it’s user’s information is secure as well as transactional amounts.

Also, since XMR’s platform is community driven, it connects users with others around the world. This helps create a sense of being part of something more significant.

coinmag

Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology.

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