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On January 10, 2017, the privacy of Monero transactions were 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''.<ref>{{cite news|last1=O'Leary|first1=Rachel Rose|title=Increased Hashrate Forces Premature Monero Hard Fork Sep 8, 2017 at 15:00 UTC by Rachel Rose O'Leary|url=https://www.coindesk.com/increased-hashrate-forces-premature-monero-hard-fork/|work=CoinDesk|date=September 8, 2017}}</ref>
On January 10, 2017, the privacy of Monero transactions were 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''.<ref>{{cite news|last1=O'Leary|first1=Rachel Rose|title=Increased Hashrate Forces Premature Monero Hard Fork Sep 8, 2017 at 15:00 UTC by Rachel Rose O'Leary|url=https://www.coindesk.com/increased-hashrate-forces-premature-monero-hard-fork/|work=CoinDesk|date=September 8, 2017}}</ref>

== Privacy ==
[[File:CryptoNote blockchain analysis ambiguity.gif|thumb|upright=2|Graphical representation of ring signature tracking.<ref name=MRL003>{{cite web|last1=Noether|last2=Noether|first1=
Shen|first2=Sarang|title=Monero is Not That Mysterious|url=https://lab.getmonero.org/pubs/MRL-0003.pdf|website=lab.getmonero.org|accessdate=6 November 2017}}</ref>]]

Monero's blockchain protects privacy in three ways. Ring signatures enable the sender to hide among other transaction outputs<ref name=whitepaper>{{cite web|last1=Saberhagen|first1=Nicolas|title=CryptoNote Whitepaper|url=http://cryptonote.org/whitepaper.pdf|website=cryptonote.org|accessdate=6 November 2017}}</ref>, stealth addresses hide the receiving address of the transaction<ref name=MRL003>{{cite web|last1=Noether|last2=Noether|first1=
Shen|first2=Sarang|title=Monero is Not That Mysterious|url=https://lab.getmonero.org/pubs/MRL-0003.pdf|website=lab.getmonero.org|accessdate=6 November 2017}}</ref> and RingCT hides the amount of the transaction<ref name=MRL005>{{cite web|last1=Noether|last2=Mackenzie|first1=
Shen|first2=Adam|title=Ring Confidential Transactions|url=https://lab.getmonero.org/pubs/MRL-0005.pdf|website=lab.getmonero.org|accessdate=6 November 2017}}</ref>. As a consequence, Monero features an opaque blockchain. This is sharp contrast with transparent and traceable blockchain used by [[Bitcoin]]<ref name=btc_trace>{{cite web|last1=Reynolds|last2=Irwin|first1=
Perri|first2=Angela|title=Tracking digital footprints: anonymity within the bitcoin system|url=http://www.emeraldinsight.com/doi/full/10.1108/JMLC-07-2016-0027|website=emeraldinsight.com|accessdate=6 November 2017}}</ref>. Thus, Monero is said to be "private, optionally transparent".

Monero has two sets of keys, called a "view key" and a "spend key"<ref name=MediumBlog>{{cite web|title=A beginner’s guide to Monero|url=https://medium.com/@linda.xie/a-beginners-guide-to-monero-7a5df2c50ed9|website=medium.com|accessdate=6 November 2017}}</ref>. View key can be separately shared to enable optional transparency. However, the system is designed to ease processing on mobile devices<ref name=whitepaper>{{cite web|last1=Saberhagen|first1=Nicolas|title=CryptoNote Whitepaper|url=http://cryptonote.org/whitepaper.pdf|website=cryptonote.org|accessdate=6 November 2017}}</ref>, as it is impossible to calculate an accurate wallet balance without a spend key.<ref name=whitepaper>{{cite web|last1=Saberhagen|first1=Nicolas|title=CryptoNote Whitepaper|url=http://cryptonote.org/whitepaper.pdf|website=cryptonote.org|accessdate=6 November 2017}}</ref>

== Problems ==
In April of 2017 new research unearthed two major threats to Monero user's privacy. First threat, described as "Leveraging Output Merging", involves tracking transactions where two outputs belong to the same user,<ref name=singapore_paper>{{cite web|first1=Amrit|last1=Kumar|first2=Clément|last2=Fischer|first3=Shruti|last3=Tople|first4=Prateek|last4=Saxena|title=A Traceability Analysis of Monero’s Blockchain|url=https://eprint.iacr.org/2017/338.pdf|website=eprint.iacr.org|accessdate=6 November 2017}}</ref> such as when a user is sending the funds to himself ("churning"). Second threat, "Temporal Analysis", shows that predicting the right output in a ring signature is easier than previously thought.<ref name=singapore_paper>{{cite web|first1=Amrit|last1=Kumar|first2=Clément|last2=Fischer|first3=Shruti|last3=Tople|first4=Prateek|last4=Saxena|title=A Traceability Analysis of Monero’s Blockchain|url=https://eprint.iacr.org/2017/338.pdf|website=eprint.iacr.org|accessdate=6 November 2017}}</ref>


==Controversial activity==
==Controversial activity==

Revision as of 12:48, 10 November 2017

Monero
Monero Logo
ISO 4217
Unit
PluralMonero, moneroj
Symbolɱ‎
Demographics
Date of introduction18 April 2014; 10 years ago (2014-04-18)
User(s)Worldwide

Monero (XMR) is an open-source cryptocurrency created in April 2014 that focuses on privacy, decentralization, and scalability that runs on Windows, MacOS, Linux, Android, and FreeBSD.[2]

Design

Unlike many cryptocurrencies that are derivatives of Bitcoin, Monero is based on the CryptoNote protocol and possesses significant algorithmic differences relating to blockchain obfuscation.[3][4] By providing a high level of privacy, Monero is fungible, meaning that every unit of the currency can be substituted by another unit. These units are indistinguishable from one another. This makes Monero different from public-ledger cryptocurrencies like Bitcoin, where addresses previously associated with undesired activity can be blacklisted and refused by network members.[5] Monero is sometimes employed by Bitcoin users to break link between transactions, with bitcoins first converted to Monero, then after some delay, converted back and sent to an address unrelated to those used before.[6]

In particular, the ring signatures mix spender's address with a group of others, making it exponentially more difficult to establish a link between each subsequent transaction.[7][6] Also the "stealth addresses" generated for each transaction make it impossible to discover actual destination by anyone else but the address owner. Finally, the "ring confidential transactions" mechanism hides the transferred amount.[7]

Monero is designed to be resistant to application-specific integrated circuit mining which are commonly used to mine other cryptocurrencies such as Bitcoin.[8] It can be mined somewhat efficiently on consumer grade hardware such as x86, x86-64, ARM or even consumer grade GPUs.[8]

History

The underlying CryptoNote protocol that Monero is based on was originally launched by pseudonymous author Nicolas van Saberhagen in October 2013.[7]

Monero was originally launched by a Bitcointalk forum user only known as "thankful_for_today" under the name BitMonero which is a compound of Bit (as in Bitcoin) and Monero (literally meaning "coin" in Esperanto).[7] Five days later, the currency's supporters opted for the name to be shortened to Monero.[3]

In September 2014, Monero was attacked when an unknown party exploited a flaw in CryptoNote that permitted the creation of two subchains that refused to recognize the validity of transactions on each other. CrytoNote later released a patch for the flaw, which Monero implemented.[9][10]

Monero experienced rapid growth in market capitalization and transaction volume during the year 2016, partly due to adoption in 2016 by major darknet market AlphaBay,[11] which was closed in July 2017 by law enforcement.[12]

On January 10, 2017, the privacy of Monero transactions were 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.[13]

Privacy

Graphical representation of ring signature tracking.[14]

Monero's blockchain protects privacy in three ways. Ring signatures enable the sender to hide among other transaction outputs[15], stealth addresses hide the receiving address of the transaction[14] and RingCT hides the amount of the transaction[16]. As a consequence, Monero features an opaque blockchain. This is sharp contrast with transparent and traceable blockchain used by Bitcoin[17]. Thus, Monero is said to be "private, optionally transparent".

Monero has two sets of keys, called a "view key" and a "spend key"[18]. View key can be separately shared to enable optional transparency. However, the system is designed to ease processing on mobile devices[15], as it is impossible to calculate an accurate wallet balance without a spend key.[15]

Problems

In April of 2017 new research unearthed two major threats to Monero user's privacy. First threat, described as "Leveraging Output Merging", involves tracking transactions where two outputs belong to the same user,[19] such as when a user is sending the funds to himself ("churning"). Second threat, "Temporal Analysis", shows that predicting the right output in a ring signature is easier than previously thought.[19]

Controversial activity

The feasibility of CPU mining Monero has made it viable for malicious actors to covertly distribute miners embeded in malware, utilising the victim's hardware and electricity for the financial gain of the malware developer.[20][21]

The JavaScript implementation of Monero miner Coin-Hive has made it possible to embed the miner into a website in such a way to utilise website visitor's CPU to mine the cryptocurrency while the visitor is consuming the content of the webpage. While this can be done with user's consent in an effort to provide an alternative funding model to serving ads,[22] some websites have done this without informed consent which has prompted the in-browser miners to be blocked by browser extensions and ad blocking subscription lists.[21][23]

See also

References

  1. ^ "Monero (XMR) Price Chart, Market Cap, Index and News". Investing.com. Retrieved 9 August 2017.
  2. ^ Gallagher, Sean (4 August 2017). "Researchers say WannaCry operator moved bitcoins to "untraceable" Monero". Ars Technica.
  3. ^ a b Rizzo, Pete (February 4, 2017). "Drugs, Code and ICOs: Monero's Long Road to Blockchain Respect". CoinDesk.
  4. ^ Lopp, Jameson (April 9, 2016). "Bitcoin and the Rise of the Cypherpunks". CoinDesk.
  5. ^ Bovaird, Charles (2017-05-28). "What to Know Before Trading Monero". Coindesk.
  6. ^ a b van Wirdum, Aaron (September 1, 2016). "How Bitcoin Users Reclaim Their Privacy Through Its Anonymous Sibling, Monero". Bitcoin Magazine.
  7. ^ a b c d Greenberg, Andy (2017-01-25). "Monero, the Drug Dealer's Cryptocurrency if Choice, is on Fire". Wired.
  8. ^ a b Tsihitas, Theo (September 22, 2017). "Monero vs Bitcoin: Monero Adopted by Privacy Focused Crypto Users". CoinCentral.
  9. ^ Werner, Albert (September 8, 2014). "Monero network exploit post-mortem". Cryptonote forum.
  10. ^ Macheta, Jan; Noether, Surae; Noether, Sarang; Smooth, Javier (12 September 2014). "MRL-0002: Counterfeiting via Merkle Tree Exploits within Virtual Currencies Employing the CryptoNote Protocol" (PDF). Monero Research Labs.
  11. ^ Greenberg, Andy (25 January 2017). "Monero, the Drug Dealer's Cryptocurrency of Choice, Is on Fire". Wired.
  12. ^ Popper, Nathaniel; Ruiz, Rebecca R. (20 July 2017). "2 Leading Online Black Markets Are Shut Down by Authorities". The New York Times.
  13. ^ O'Leary, Rachel Rose (September 8, 2017). "Increased Hashrate Forces Premature Monero Hard Fork Sep 8, 2017 at 15:00 UTC by Rachel Rose O'Leary". CoinDesk.
  14. ^ a b Noether, Shen; Noether, Sarang. "Monero is Not That Mysterious" (PDF). lab.getmonero.org. Retrieved 6 November 2017.
  15. ^ a b c Saberhagen, Nicolas. "CryptoNote Whitepaper" (PDF). cryptonote.org. Retrieved 6 November 2017.
  16. ^ Noether, Shen; Mackenzie, Adam. "Ring Confidential Transactions" (PDF). lab.getmonero.org. Retrieved 6 November 2017.
  17. ^ Reynolds, Perri; Irwin, Angela. "Tracking digital footprints: anonymity within the bitcoin system". emeraldinsight.com. Retrieved 6 November 2017.
  18. ^ "A beginner's guide to Monero". medium.com. Retrieved 6 November 2017.
  19. ^ a b Kumar, Amrit; Fischer, Clément; Tople, Shruti; Saxena, Prateek. "A Traceability Analysis of Monero's Blockchain" (PDF). eprint.iacr.org. Retrieved 6 November 2017.
  20. ^ Tung, Liam (October 31, 2017). "Android security: Coin miners show up in apps and sites to wear out your CPU". ZDNet.
  21. ^ a b Goodin, Dan (October 30, 2017). "A surge of sites and apps are exhausting your CPU to mine cryptocurrency". Ars Technica.
  22. ^ Thomson, Iain (October 19, 2017). "Stealth web crypto-cash miner Coin Hive back to the drawing board as blockers move in". The Register.
  23. ^ Pearson, Jordan (2017-09-19). "Someone Made an Ad Blocker But for Cryptocurrency Mining". Motherboard.
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