Bringing Privacy to Crypto
Monero (XMR) is a privacy-centric cryptocurrency that uses Proof-of-Work to secure its blockchain. Known as the preferred cryptocurrency of darknet marketplaces (DNMs) and popular among libertarians, Monero uses advanced cryptographic technologies to confer anonymity on its users and render transactions untraceable. If you like to keep your financial transactions discreet and resent the state’s incursion into our digital lives, Monero is the crypto for you.
Impervious to censorship, Monero uses an ASIC-resistant PoW consensus algorithm (RandomX) to issue new coins and secure transactions. It is currently a top 15 cryptocurrency by market cap and the most valuable and widely used privacy coin on the market.
Mission and Values
Open source and fiercely dedicated to financial privacy, freedom and security, Monero provides economic empowerment to individuals, particularly those in oppressed countries and depressed economies.
In a 2020 interview, lead developer Riccardo Spagni railed against overregulation in the financial market, claiming, “Regulators need to learn that having a publicly traceable currency is not good for anyone. It’s not good for governments, it’s not good for individuals, and it’s not good for businesses either. Actually, privacy is what governments, individuals and businesses want.
“I think that people are starting to realize that privacy is just a natural state. It is not a weird thing to want to have some privacy.”
Performance to Date
Only a handful of cryptocurrencies such as Bitcoin (and its derivatives e.g. Bitcoin Cash) and Ethereum have a higher per-unit value than Monero. This is a reflection of the high level of trust placed in the cryptography (ring signatures, stealth addresses, etc) that ensures the currency’s strong privacy guarantees.
Monero’s mining algorithm undergoes periodic protocol changes to ensure that it can be fairly mined using GPUs as well as dedicated ASICs. Monero also has a crowdfunding system whereby individuals can suggest particular features or upgrades, and receive the necessary financial support to implement their proposal.
Monero launched in 2014 as a fork of BitMonero, formerly Bytecoin (BCN). There was no pre-mine or ‘insta-mine’ and no percentage of the block reward was allocated to development. The project is based on the CryptoNote protocol and advanced by a collective of mostly anonymous or pseudonymous developers. To date, Monero has had over 500 contributors.
The block reward is currently 2.77 XMR and the reward rate is programmed to steadily decrease until the end of May 2022, when 18.132 million XMR will be in circulation. At this stage, a 0.6 XMR block reward will remain indefinitely.
Factoring a “tail emission” of 0.6 XMR per block, there will be an equal amount of Monero as bitcoin (roughly 21 million) by the year 2040.
A permissionless, open-source blockchain, Monero employs cryptographic techniques such as ring signatures, Ring Confidential Transactions (RingCT) and stealth addresses to obfuscate every layer of a transaction (info identifying sender, receiver or transaction). Because Monero has no pre-set block size, it is also infinitely scalable. Anyone with a connected device or web browser can participate in mining XMR.
Because of its privacy features, Monero is considered the crypto of choice among purveyors and users of darknet marketplaces, which has drawn increased scrutiny from law enforcement. In 2020, the IRS offered a bounty of up to $625,000 to anyone who could crack Monero’s privacy.
However, as mentioned earlier, XMR is also widely used by citizens in countries known for banking corruption, digital surveillance and authoritarian governance. Though united by common ideology, the community is therefore distributed far and wide.
There are multiple IRC channels that facilitate dialogue between users, listed here on Monero’s website. The official Monero Twitter has over 325,000 followers, with activity also spread across Reddit, Telegram, Bitcoin Talk, Stack Exchange, Mattermost, Facebook and GitHub.
Market and Competition
Monero is the best-known privacy-focused cryptocurrency, but there are others, most notably Zcash, Dash, Verge, and Horizen. Some users prefer combining bitcoin with coin-mixing technologies (e.g. CoinJoin) to scramble transactions.
Despite competition, Monero is by far the largest and most secure privacy coin at this time, with a sizable decentralized developer community continually strengthening the protocol.
News and Views
Monero is a community-run project with no CEO or executive committee. Everything is built by volunteers or community-financed developers who pledge their time to the project because they believe in it. Monero’s developers did not retain an XMR stake for themselves upon launching the project in 2014.
To keep up to date with all things Monero, your best bet is to follow on Twitter or Reddit, or read the official Monero blog. In a bid to support organic workgroups, Monero also has various resources the community can use to meet and plan projects.