Before explaining how it works the Monero blockchain and its native token XMR, it is important to start at the beginning and it is essential to understand that the Bitcoin network, the mother of all other digital assets, allows all transactions carried out there are anonymousHowever, all their movements can be traced. A proper audit could identify those responsible for these transactions.
On the other hand, Monero's technology, despite being based on a blockchain or blockchain like Bitcoin and other cryptocurrencies, includes very specific features that allow transactions to be made without revealing addresses or public keys of the participants, nor the amount of each transaction. Exact information about the transferred amount is available only to the parties directly involved in the transaction, namely the sender and recipient of the funds.
While in cryptocurrency networks like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Ripple (XRP), DogeCoin (DOGE), Solana (SOL) and Litecoin (LTC), Among thousands more, they offer a public key that runs on the blockchain and a private one that is only managed by the senders and receivers, Monero uses a protocol that incorporates a Spend Key or spending key, and a View Key or display key. Both are to ensure transaction security.
The Spend Key is required to perform transactions involving the use of account funds, and the View Key allows a trusted third party to access the account. the details of a transaction incoming, but not to those of an outgoing transaction. Therefore, if necessary, BTC, ETH, ADA, XPR, DOGE, SOL and LTC can be audited and it can be known who sent the money and who used it, but Monero cannot.
Why are Monero transactions untraceable?
The “untraceable” quality predates Monero’s fame. This network and operations with XMR guarantee privacy and anonymity, as it provides two fundamental principles: stealth addresses and signature rings.
Stealth addresses are those that allow the sender to create a unique public address for each transaction and on behalf of the recipient. However, the recipient has the option of using a single public address to receive all their payments. This is true for many cryptocurrencies, such as Bitcoin and the others already mentioned.
In the case of Monero, Each user generates a private view key and a private spending key. The first makes it possible to view all transactions associated with your account, and the second, similar to the private key in Bitcoin, is used to authorize payments.
On the other hand, Signature rings are a cryptographic concept that allows you to create signatures digital. These can be used by any member of a group that manages an account and with private keys. So, when making a transaction with XMR, Monero's wallet forms a ring with other users' keys randomly taken from the blockchain. This makes it impossible to determine which specific key was used to sign a particular transaction, thus ensuring its anonymity.
Who created and who runs Monero?
The beginnings of the Monero blockchain date back to 2012, when this network was announced in the publication of the CryptoNote report, a company created by developer Nicolas Saberhagen, who is the pseudonym of someone whose identity is unknown. This report presented cryptographic methods and proposed a new electronic cash system.
Later, in July 2012, Bytecoin became the first cryptocurrency based on the CryptoNote protocol. In 2014, the first fork to create Bitmonero which was later renamed Monero.
Monero is a network developed by an anonymous team. Among the names associated with this blockchain, Riccardo Spagni, who maintained the project until December 2019, when he publicly abandoned it. This cryptocurrency is funded by donations from its community, which contributes to the project through a fundraising system.
De Spagni is known to have begun his foray into the world of cryptocurrencies in 2011, initially as bitcoin miner. Later, co-founded Tari, a Monero-centric merger chain designed to power non-fungible tokens (NFTs).
As an open source project, Monero is funded by donations from its community.. This is how people from all over the world have contributed to the project through proposals and financial contributions, which are managed through Monero's community fundraising system, known as CCS.
What underpins Monero's value?
For many users, Monero's main attraction and what underpins its value as a digital asset lies in its strict approach to privacy. And it's all about anonymity. This cryptocurrency offers the ability to make transactions at any time and for any purpose, without being tracked by government entities, hackers, or third parties.
Furthermore, XMR asset cannot be blocked or blacklisted by companies that suspect illegal activities simply because there is no effective way to track them.
Furthermore, and beyond its functionality as a means of exchange for goods and services online, XMR can also be valuable for investors who anticipate an increase in demand for privacy in future operations. This could boost the token's price and market capitalization.
The Sword of Damocles
While anonymity and untraceability of each operation on the Monero network or with its cryptocurrency XMR is what represents its greatest strength, it is, at the same time, a The sword of Damocles hanging over the blockchain.
Advocates of decentralized finance or DeFi They have a noble purpose in speaking of inclusion and democratization of financial operations for groups traditionally segregated from the traditional banking system due to poverty, living in rural areas, and even for reasons of sexual, religious, or racial discrimination.
In these cases, Monero appears as the ideal solution for democratic inclusion. But, organized crime groups that need to move huge sums of money can take advantage of these characteristics in money laundering, terrorist financing, human trafficking and sexual exploitation or drug trafficking. The same thing happens with Monero as with a diamond-tipped scalpel: In the right hands, it saves lives, and in the wrong hands, it steals them.
