Launched in 2014, Monero (XMR) is an open-source, privacy-oriented cryptocurrency that is built and operates on the blockchain concept. These blockchains, which form the underlying technology behind digital currencies, are public ledgers of participants' activities that show all the transactions on the network.
Monero's blockchain is intentionally configured to be opaque. It makes transaction details – like the identity of senders and recipients, and the amount of every transaction - anonymous by disguising the addresses used by participants.
Along with anonymity, the mining process for monero is based on an egalitarian concept - the principle that all people are equal and deserve equal opportunities. When launching monero, its developers did not keep any stake for themselves, and banked on contributions and community support to further develop the virtual currency.
Monero supports a mining process where individuals get rewarded for their activities by joining mining pools, or they can mine moneros individually. Monero mining can be performed on a standard computer, and does not need any specific hardware such as the application-specific integrated circuits (ASICs). Monero runs on all leading OS platforms, including Windows, macOS, Linux, Android, and FreeBSD
How Does Monero Improve Privacy?
Monero alleviates privacy concerns using the concepts of ring signatures and stealth addresses.
Ring signatures enable a sending participant to conceal his identity from other participants in a group. Ring signatures are anonymous digital signatures from one member of the group, but they don’t reveal which member signed the transaction
To generate a ring signature, the monero platform uses a combination of a sender’s account keys and clubs it with public keys on the blockchain, which makes it unique as well as private. This enables the ability to hide the identity of the sender, as it is computationally impossible to ascertain which of the group members' keys was used to produce the complex signature.
Stealth addresses add additional privacy, as these randomly generated addresses for one-time use are created for each transaction on behalf of the recipient. The use of these stealth addresses enables concealing the actual destination address of a transaction, and it hides the identity of the receiving participant.
Additionally, Ring Confidential Transactions, or RingCT, enables hiding the transaction amount. After achieving success in hiding the identities of senders and receivers, the RingCT functionality was introduced in January 2017, and is made mandatory for all transactions executed on the monero network.