Monero is the largest and most popular cryptocurrency with enhanced privacy features. The name “Monero” comes from Esperanto, meaning “coin.” Its market ticker is XMR. Monero started trading on April 18, 2014, and quickly secured a spot in the top 10 cryptocurrencies. As of September 2024, Monero ranks in the top 30, with a market cap of around $3.17 billion, according to CoinGecko. The network is supported by 163 full nodes.
Monero originated as a fork of Bytecoin, which was the first project focused on enhancing transaction privacy.
Despite privacy concerns raised by cybersecurity experts like Edward Snowden, Monero, along with Zcash (ZEC) and Dash (DASH), is widely used for its strong anonymity features. Due to this high level of privacy, regulators in countries like Japan, South Korea, and the UAE have banned XMR usage. Under regulatory pressure, several major crypto exchanges, including Binance, Kraken, OKX, Huobi, Upbit, Coincheck, Bittrex, and BitBay, have delisted XMR or restricted its usage in specific jurisdictions.
Monero’s Anonymization Technologies
Monero is based on CryptoNote, a cryptographic protocol created in 2012 that serves as the foundation for a family of privacy-focused digital assets.
Monero’s anonymity is ensured through technologies such as:
- Ring signatures. These cryptographic signatures allow information exchange without revealing personal data. In Monero, this feature “mixes up” the transaction path, mimicking the movement of funds.
- Ring confidential transactions (RingCT). This feature encrypts the transaction amount, time, sender, and recipient details. It works by adding at least ten fake records to the real transaction, making it difficult to trace. RingCT was fully implemented in September 2017.
- Stealth addresses. Each participant’s details are hidden through one-time, unique stealth addresses. When sending funds to the same user multiple times, the sender generates a new address, while the receiver collects funds from a new one each time.
- Kovri I2P. Built using C++ on the I2P protocol, Kovri routes all traffic, including IP addresses and metadata, through a decentralized network of gateways, similar to Tor. This prevents data leaks in real-time transactions.
In the spring of 2024, Monero implemented a comprehensive upgrade called Full-Chain Membership Proofs. A key part of this update was mitigating potential risks related to spam attacks that could be used to reveal wallet addresses through statistical analysis. Previously, each transaction was hidden among 16 other possible inputs, making it theoretically traceable. However, after the upgrade, the number of potential inputs increased to 100 million, significantly boosting Monero’s transaction privacy.
UPD: On September 9, 2024, a video surfaced online, supposedly recorded in August 2023. In the video, representatives of Chainalysis describe methods for tracking XMR transactions using their own “malicious” nodes deployed on Monero’s mainnet. Whether this is still relevant following the Full-Chain Membership Proofs update remains unclear. The Monero team hasn’t commented on the leak.
Top 7 Facts About Monero
Here are some interesting facts that will help you understand the Monero project better:
- Hackers unintentionally helped expose vulnerabilities in Monero during its launch phase. During the coin’s development, a group of hackers attacked the developers’ servers. As a result, the vulnerabilities were identified and fixed, improving the platform’s security. This happened before the public launch, ensuring a stable system from day one.
- No limit on XMR emission. In May 2022, after 18.1 million XMR were minted, the tail emission mechanism was activated. This guarantees miners a steady reward of 0.6 XMR per block. By September 2024, there were around 18.45 million XMR in circulation.
- XMR mining is accessible through regular PCs. Monero uses a variant of the Proof-of-Work consensus algorithm called RandomX, which is optimized for CPU-based computations and resistant to ASIC miners. This allows a large number of users to participate in mining, contributing to the network’s decentralization.
- Monero sparked the creation of JavaScript mining. The technology behind Monero led to the development of innovative web-based mining systems. This resulted in mining pools like Coinhive, which allowed users to mine cryptocurrency through their browsers.
- Mining botnets owe their rise to Monero. The ability to mine through browsers didn’t just attract legitimate users but also hackers. Browser-based mining became a common feature in malware. Although Coinhive shut down in 2019 due to this, its legacy continues. According to Guardicore Labs, a mining botnet called Vollgar used Microsoft SQL servers to mine XMR and VOLLAR starting in 2018. Botnet attacks like MrbMiner, Black-T, and z0Miner still target cloud servers today. A 2018 report by Palo Alto Networks estimated that 5% of all XMR in circulation at that time was mined through cryptojacking.
Cryptojacking is a type of malware that uses infected devices’ processing power, like PCs, tablets, smartphones, and more, to mine cryptocurrency. Mining botnets are one variation of cryptojacking.
- The coin is popular on the black market. According to a 2020 RAND Corporation study, Monero was one of the top four cryptocurrencies mentioned in darknet markets, alongside Bitcoin, Ethereum, and Litecoin.
- Monero is widely used for donations. In 2024, many privacy-oriented projects and organizations accept donations in XMR, including The Tor Project, Qubes OS, and Riseup, among others.
Monero continues to be one of the most popular privacy-oriented coins. Thanks to its cutting-edge technologies, XMR provides user privacy at a level unmatched by most other cryptocurrencies. The active support from its community and developers keeps Monero evolving, even as government regulation of the crypto market tightens.
