Monero

Monero (/məˈnɛroʊ/; XMR) is a privacy-focused cryptocurrency released in 2014. It is an open-source protocol based on CryptoNote. It uses an obfuscated public ledger, meaning anyone can send or broadcast transactions, but no outside observer can tell the source, amount, or destination.[1] A proof of work mechanism is used to issue new coins and incentivize miners to secure the network and validate transactions.

This article is about the cryptocurrency. For other uses, see Monero (disambiguation).
Monero
Denominations
Ticker symbolXMR
Precision10−12
Subunits
 ​1⁄1012piconero
Development
Original author(s)Nicolas van Saberhagen
White paper"CryptoNote v 2.0"
Initial release18 April 2014 (2014-04-18)
Latest release0.17.1.7 / 15 December 2020 (2020-12-15)
Code repositorygithub.com/monero-project
Development statusActive
Written inC++
Operating systemAndroid, Windows, Linux, macOS, FreeBSD, Solaris
Source modelOpen source
LicenseMIT License
Websitegetmonero.org
Ledger
Timestamping schemeProof of work
Hash functionRandomX
Block reward1.26 XMR
Block time2 minutes
Block explorerxmrchain.net
Circulating supply17,788,189

    Monero uses different privacy-enhancing technologies to achieve anonymity and fungibility. It has attracted users desiring privacy measures that are not provided in more popular cryptocurrencies. However, it has also gained publicity for illicit use in darknet markets.[2][3]

    History

    In 2014, Bitcointalk forum user thankful_for_today forked the codebase of Bytecoin into the name BitMonero, which is a compound of bit (as in Bitcoin) and monero (literally meaning "coin" in Esperanto).[4] The release of BitMonero was poorly received by the community that initially backed it. Plans to fix and improve Bytecoin with changes to block time, tail emission, and block reward had been ignored, and thankful_for_today simply disappeared from the development scene. A group of users led by Johnny Mnemonic decided that the community should take over the project, and five days later they did while also changing the name to Monero.

    Due to its privacy features, Monero experienced rapid growth in market capitalization and transaction volume during 2016, much more than any other cryptocurrency that year. This growth was driven by its uptake in the darknet market, where people used it to buy stolen credit cards, guns, and drugs.[4] Two major darknet markets were shut down in July 2017 by law enforcement.[5] From the beginning, Monero has been used by people holding other cryptocurrencies like Bitcoin to break the link between transactions, with the other cryptocoins first converted to Monero, then after some delay converted back and sent to an address unrelated to those used before.

    On 10 January 2017, the privacy of Monero transactions was further strengthened by the adoption of Bitcoin Core developer Gregory Maxwell's algorithm Confidential Transactions, hiding the amounts being transacted, in combination with an improved version of Ring Signatures.[6]

    After many online payment platforms shut down access for white nationalists following the Unite the Right rally in 2017, some of them, including Christopher Cantwell and Andrew Auernheimer ("weev"), started using and promoting Monero.[7][8]

    The operators behind the May 2017 global ransomware incident WannaCry converted their proceeds into Monero.[9] In June 2017, The Shadow Brokers, the group that leaked the code used in WannaCry, started accepting payments in Monero.[9]

    Malicious hackers have previously embedded Monero mining code into websites and apps seeking profit for themselves.[10] In late 2017, malware and antivirus service providers blocked a JavaScript implementation of Monero miner Coinhive that was embedded in websites and apps, in some cases by hackers. Coinhive generated the script as an alternative to advertisements; a website or app could embed it, and use website visitor's CPU to mine the cryptocurrency while the visitor is consuming the content of the webpage, with the site or app owner getting a percentage of the mined coins.[11] Some websites and apps did this without informing visitors, and some hackers implemented it in way that drained visitors' CPUs. As a result, the script was blocked by companies offering ad blocking subscription lists, antivirus services, and antimalware services.[12][10]

    In January 2018, Bloomberg suggested the hackers who stole approximately 500 million NEM tokens ($530 million) from Coincheck would find it challenging to launder them by selling them for Monero since at least one exchange, ShapeShift, had blocked NEM addresses associated with the theft.

    In the first half of 2018, Monero was used in 44% of cryptocurrency ransomware attacks.[13]

    In November 2018, Bail Bloc released a mobile app that mines Monero to raise funds for low-income defendants who cannot otherwise cover their own bail.[14][15]

    Privacy features
    Monero GUI 0.12.3.0 on Windows 10

    Monero enforces privacy by default. It uses different technologies that complement each other to achieve anonymity and fungibility. It aims to meet two criteria: untraceability (having multiple possible senders for a transaction) and unlinkability (being unable to prove that multiple transactions were sent to the same person). Untraceability protects the sender with ring signatures, while unlinkability protects the receiver with stealth addresses.[16]

    Ring signatures

    Monero is based on the CryptoNote protocol, which deploys one-time ring signatures as the core cryptographic primitive to provide anonymity. Ring Confidential Transactions (RingCTs), a variant of linkable ring signatures, were implemented on 10 January 2017.[17] RingCTs have two components. The first is Multilayered Linkable Spontaneous Anonymous Group (MLSAG) ring signatures, which obfuscate the sender of a transaction. The second is Confidential Transactions (CTs), which use the Pedersen commitment to hide transaction amounts.[18]

    Stealth addresses

    Monero generates one-time stealth addresses to hide the address of the recipient using the Dual-Key Stealth Address Protocol (DKSAP).[19] It is generated by the sender on behalf of the recipient using two pieces of information. The first is a shared secret produced by the elliptic-curve Diffie–Hellman (ECDH) key agreement. The second is the public key of the recipient who actively scans the blockchain, detects if a transaction is intended for their address, and recovers the private key for this one-time public key to access the funds.[20]

    Bulletproofs

    In October 2018, Monero implemented bulletproofs, a non-interactive zero-knowledge proof (NIZKP) protocol.[21] It replaced the Borromean ring signatures used in RingCT's range proofs. Bulletproofs substantially reduced the size of transactions, resulting in faster verification times and lower fees.[22]

    Dandelion++

    Monero uses an unusual method of transaction broadcast propagation to obscure the IP address of the device broadcasting the transaction. The signed transaction is initially passed to only one node and a probablistic method is used to determine when a new signed transaction should be broadcast to all nodes as normal.[23][24]

    Mining

    Monero is designed to be resistant to application-specific integrated circuit (ASIC) mining, which is commonly used to mine other cryptocurrencies such as Bitcoin.[25][26] It can be mined somewhat efficiently on consumer grade hardware such as x86, x86-64, ARM and GPUs, and as a result it is popular among malware-based miners.[27][28]

    Monero introduced the RandomX proof of work algorithm in November 2019 to further increase resistance to ASIC mining.[29][30][31]

    Transaction linkability

    In April 2017, researchers highlighted three major threats to Monero users' privacy. The first relies on leveraging the ring signature size of zero, and ability to see the output amounts. The second, "Leveraging Output Merging", involves tracking transactions where two outputs belong to the same user, such as when they send funds to themselves ("churning"). Finally, "Temporal Analysis", shows that predicting the right output in a ring signature could potentially be easier than previously thought.[32] The Monero development team responded that they had already addressed the first concern with the introduction of RingCTs in January 2017, as well as mandating a minimum size of ring signatures in March 2016.[33]

    In 2018, researchers presented possible vulnerabilities in a paper titled "An Empirical Analysis of Traceability in the Monero Blockchain".[2] The Monero team responded in March 2018.[34]

    Regulatory responses

    Monero and other privacy-oriented currencies have concerned regulators targeting illicit activities and money laundering.[35] Exchanges in South Korea and Australia have delisted Monero and other privacy coins due to regulatory pressure.[36] In September 2020, the IRS Criminal Investigation (IRS-CI) division offered up to $625,000 to contractors who can trace transactions or provide statistical probabilities that connect transaction data to specific users in Monero or Bitcoin's Lightning Network.[37][38] On 30 September, the IRS awarded one-year contracts to data analysis firms Integra FEC and Chainalysis.[39]

    References
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    3. "Meet Monero, the Currency Dark Net Dealers Hope Is More Anonymous Than Bitcoin". Motherboard. 2016-08-23. Retrieved 2018-11-18.
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