This week’s look at altcoins and my eyes are on Monero. I saw a great talk on Monero a year ago at Coinfest Estonia. David Latapie gave an insightful talk bringing out something that can be viewed as Bitcoin’s weakness – privacy. What if you don’t want your neighbour to know how much coin you have? Not saying that your neighbour does but if they are intelligent enough and you do all of your dealings in Bitcoin they could have a pretty close estimation. That is of course assuming that you only ever use the same address for storing and sending your coins. Nevertheless all of the transactions ever made will be recorded in the blockchain and anyone can view them.
Monero – Specs and info
Monero – XMR is a great crypto that is focused on keeping your affairs private. It, like many other cryptocurrencies, is open source, decentralized and scalable. Most altcoins are based on blockchain – forks of Bitcoin if you like. Monero is different because it is based on the CryptoNote protocol similarly to Dashcoin, Bytecoin, Digitalnote and many others. The coin cap is approx 18.4 million and it is estimated that they are to be mined in 8 years.
It was launched on April the 18th in 2014. Originally called BitMonero – derivative of Bitcoin & Monero (means coin in Esperanto, the artificial language). Soon after the community decided to shorten it to just Monero. Originally launched as the first fork of Bytecoin but had 2 huge differences from its parent. Firstly, the block time was 60 seconds compared to Bytecoin’s 120. Secondly the emission speed was decreased by 50%.
The daemon uses original CryptoNote protocol apart from the changes to the emission speed and block time. The protocol is based on one time ring signatures and stealth addresses. These are a way of having a private exchange of funds between the payer and the payee. The result is decentralized mixing that is based on well-tested algorithms. The Monero Research Lab has subsequently made many more changes to improve on the user’s privacy in this CryptoNote based crypto.
With Monero you can essentially be your own bank and keep your business private from any prying eyes you don’t want to have access to your funds. So here’s the difference from Bitcoin – Monero’s system is cryptographically sound and allows you to rend and receive funds without the transactions being visible on the blockchain to the public eye. Everything is private by default and you don’t need to worry about trying to mix your tracks. The ring signatures enable untraceable transactions. This makes it extremely unlikely that transactions could be linked to a particular user.
Bitcoin vs Monero
Now after reading that Monero efficiently makes all of the transactions truly private, untraceable and anonymous, why do we need Bitcoin? Common question I get asked. Monero’s success isn’t contingent on Bitcoin’s failure. They can live happily alongside just like there are so many other different cryptos. It is a common misconception that a new altcoin that seems great in many ways will wipe out its preceders. Many probably won’t and it is not their goal. Bitcoin and Monero are similar, yet different. They serve different purposes and both bring ways of innovation for the future.
Monero’s price has been on a strong uptrend this year. I am interested to see where it can go. This is definitely a coin for the future and I’m excited to see how it can bring more privacy and freedom to our financial affairs. Get your Moneros!