Monero (XMR) is an open-source cryptocurrency created in April 2014 that focuses on privacy, decentralization, and scalability. Unlike many cryptocurrencies derived from Bitcoin, Monero is based on the CryptoNote protocol and has significant algorithmic differences in blockchain obfuscation. Monero's modular code structure has been appreciated by Wladimir J. van der Laan, one of the Bitcoin core maintainers. Monero strives to be a fungible, untraceable electronic currency. Monero has a higher degree of anonymity than Bitcoin and its forks.

History of Monroe

Monero was launched on April 18, 2014, formerly known as BitMonero, which refers to Bit (like Bitcoin) and Monero (literally "coin" in "Esperanto"). After five days, the community chose to shorten the name to Monero. It is the first fork of Bytecoin based on the CryptoNote currency, but has two main differences. First, the target block time was reduced from 120 seconds to 60 seconds; second, the issuance rate was slowed down by 50% (Monero later reverted to a 120-second dwell time while maintaining the issuance time, doubling the block reward for each new block). Additionally, Monero developers found a lot of low-quality code, which was subsequently cleaned and refactored.

A few weeks after posting, a response to CryptoNight An optimized GPU miner for proof of work functions was developed.

On September 4, 2014, Monero was recovered after an unusual, novel attack on the cryptocurrency network.

On January 10, 2017, the privacy of Monero transactions was further enhanced since block #1220516 by using Bitcoin Core developer Gregory Maxwell's Ring Confidential Transactions algorithm. The ring signature algorithm increases confidentiality by not revealing the amounts involved in the transaction to those not directly involved in the transaction. Transactions will enable RingCT by default, but non-RingCT transactions can still be sent until the next hard fork in September 2017. As of early February, over 95% of non-speculative trades used the optional RingCT feature.

On March 18, 2018, Coincheck announced that it would delist the three anonymous cryptocurrencies XMR, DASH and ZEC. In addition, many exchanges in South Korea and Japan have also successively delisted currencies such as XMR, ZEC, DASH, etc., which have the function of anonymous transmission and transaction. It is speculated that it may be related to the requirements of government regulatory agencies.

On October 18, 2018, the latest hard fork of Monero changed the consensus mechanism algorithm to CryptoNight V8. This hard fork also introduces the BulletProff protocol. It can effectively reduce the transaction fee for miners without affecting the anonymity of the transaction.

Monero Features

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

Its main issuance curve will issue about 18.4 million coins over about 8 years. (18.223 million coins to be exact, around the end of May 2022). Its proof-of-work algorithm, CryptoNight, is an AES-intensive and memory-intensive operation, which significantly reduces the advantage of GPUs over CPUs.

Anti-ASIC concept

Due to the specificity of ASICs (Application Specific Integrated Circuits), specially designed ASICs usually have much higher computing power than general CPUs, GPUs, and even FPGAs. At present, Bitcoin (BTC) and other currencies that use the SHA256 algorithm almost all of their computing power comes from ASICs. supply. Litecoin (LTC) and Dash (DASH), both use Scypt and X11 algorithms respectively. However, there are still IC design companies that have developed ASICs that correspond to the above two algorithms and have much higher computing power than ordinary CPUs, GPUs, and even FPGAs, and even save power. However, ASIC can only be designed by a small number of companies, which makes the emergence of ASIC, which will lead to the problem that the computing power is too concentrated or even monopolized by a single centralized organization. For example, the government may ask ASIC manufacturers to add a "kill switch" so that it can remotely shut down or control the mining machine, which may cause threats to the operation of the entire blockchain network or even completely fail.

From the beginning of the development concept of Monero, the concept of anti-ASIC was included. However, the cryptonight algorithm it uses is designed to allow most CPUs and even FPGAs to participate in and obtain mining rewards, rather than only GPUs being able to efficiently mine. Therefore, there is no Ethash algorithm currency like Ethereum (ETH), which uses a gradually growing DAG to require high-speed Memory capacity to compete against ASICs with hardware manufacturing costs. Therefore, the core development team of Monero will modify and hard fork the algorithm of the consensus mechanism after a certain period of time to ensure that it can effectively resist the emergence of ASIC and the monopoly of computing power.

The latest algorithm revision and hard fork occurred on March 9, 2019. Generally, users who use CPU and GPU mining will have to update their mining software to continue mining after the hard fork.

Privacy

Ring signature - sender, untraceable

Obfused address - receiver, not linkable

Ring Confidentiality - Concealment of Transaction Amount

Kovri and I2P

I2P is a routing system that enables applications to send messages to each other privately without any outside intervention. Kovri is a C++ implementation of I2P that will also be integrated into Monero. If you're using Monero, Kovri will hide your network traffic so that passive network monitoring never reveals that you're using Monero. To this end, all your Monero traffic will be encrypted and routed through the I2P node. Nodes are like blind gatekeepers, they will know that your information goes through, but they don't know where it goes and the specific content of the information. I2P and Monero will have a nice symbiosis because:

1. Monroe will have an extra layer of protection

2. The number of nodes used by I2P will greatly improve the post implementation.

Kovri is still under development and not yet implemented. Monero is currently the only cryptocurrency that can hide transaction initiators, receivers, transaction amounts, and transaction IPs. It has a very high reputation in foreign geek/hacker/dark net.

Scalability

Bitcoin has had a long history of scalability problems. Simply put, the Bitcoin protocol limits the block size to 1 Mb (Translator's Note: Expansion, BCH, etc. are later). In the early days, Bitcoin didn't have any block size limit, but later on to prevent spam, a size limit was imposed.

Monero does not have any "pre-set" limit on block size. This also means that malicious miners can clog the system with oversized blocks. To prevent this from happening, the system has a block reward penalty. Here's how it works:

First, the median of the last 100 block sizes is called M100. Suppose the miner digs out a new block, the size of which is recorded as NBS (New Block Size). If NBS > M100, then the block reward will decrease as the square of NBS exceeding M100.

That is to say, if NBS is greater than M100 [10%, 50%, 80%, 100%], then block rewards will decrease accordingly [1%, 25%, 64%, 100%]. Generally speaking, M100 whose block size exceeds 2 times is not allowed, and if the block is less than or equal to 60kb, it will be exempted from any block reward penalty.

Monero strengths and weaknesses

Advantages:

• One of the best privacy cryptocurrencies
• Transactions are not linked
• Transactions are not trackable
• Blockchain has no block limit and can be dynamically expanded
• Even when the supply of Monero runs out, there will be a supply of 0.3 XMR/min to incentivize miners
• The economy has grown tremendously
• Its transparency is optional. If someone wants the transaction to be visible to someone, such as showing the key to an auditor. This also makes Monero an auditable cryptocurrency.
• Have a very capable and strong development team leading the work

Disadvantages:

• Although Monero has been designed to be ASIC resistant to avoid centralization, close to 43% of Monero's hash power is still owned by 3 mining pools:
• Monero has a much larger transaction size than other cryptocurrencies due to the many cryptographic operations involved.
• Monero wallet compatibility is not strong. In fact, Monero does not have a hardware wallet (as of this writing).
• Difficult to get started and not yet widely adopted.
• Because it is not a bitcoin-based currency, the problem Monero faces is that it is relatively more difficult to add some elements to it.

Token distribution

The distribution of Monero can be regarded as the conscience of the industry - no pre-mining, no pre-sale, POW mechanism, all block rewards are given to miners. The reward program is divided into two stages:

1. Fast stage: before May 2022, mining output of 18,132,000 Monero

2. Deceleration phase: After digging out 18,132,000 Monero coins, it will automatically enter the deceleration phase, and each block will be rewarded with 0.6 Monero coins. This keeps the overall money supply at a very small and decelerated state. Inflation rate in the first year of the deceleration phase: (365d*24h*60min*0.6XMR per block /2 min per block)/18132000XMR=0.87%, after which the annual inflation rate decreases. There is no upper limit to the total supply of Monero. Micro-inflation ensures sustainable incentives for the entire network.

How to store Monero?

The easiest way to store Monero is to go to mymonero.com.

Step 1: Click “Create a new account”;

Step 2: Write down the private login key

Step 3: Enter the login private key and get the address

Be careful not to reveal your private key.