Monero hardforks. Is undisputed privacy king.

by Eli
on 10 January 2017
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Only moments ago, Monero, hard-forked, to become the undisputed king of crypto-privacy.

Monero (XMR) was already well known among crypto-currency enthusiasts around the globe, and many have vested interest in it, given its already advanced privacy layers, and scaelable features. We wrote an article not long ago, about how Satoshi Nakamoto (Bitcoin’s elusive founder), may have been aiming for a solution not too dissimilar to what Monero is today.

Satoshi in his wisdom once said of Bitcoin, “Participants can be anonymous”,. – The truth is, that there are many levels of anonymity that can be attained, but as long as the public blockchain is ‘public’, there will always be a level of scrutiny from the powers that be, and total anonymity is something of a holy grail.

It’s true that there exist many, Bitcoin ‘mixing’ or ‘washing’ services about that try to anonymise or ‘wash’ your currency. But with a slew of new blockchain analysis techniques, the effectiveness of these mixing services come into question.

Ofcourse, privacy features are not unique to Monero, but the specific layered set which Monero uses, place it in special limelight. For example, Dash (an acronym for Digital Cash, and another privacy focused coin), uses a mixing feature, which requires a user place trust in the server(s) performing the mixing.  Dash has some risk mitigations in place, but it costs, and the jury is still out on its effectiveness.

By comparison,  Monero uses a low-level cryptographic algorithm called “ring signatures”, which join transactions, in a way where it is anonymised on-chain. This means, there is no ‘trust’ needed to be placed on any server or third-party. Also unlike most privacy focused cryptos, Monero’s privacy is the rule, - not the exception. 

Monero’s blockchain is opaque. And transactions can only be viewed with a ‘viewkey’. It is for this reason, Monero is referred to as being “truly fungible”. Fungibility is a big deal in the world of crypto. For example, 1 Bitcoin, may not necessary equal another Bitcoin, particularly, if we know that one of those coins was stolen or used in an illegal activity. Some exchanges, or merchants may not accept a ‘tainted’ coin... For this reason, Bitcoin is not, truly fungible, whereas Monero is.

But if anyone had any doubts about Monero’s capacity to keep users, anonymous, the hardfork implemented today should silence unbelievers.

What is a hard-fork ? A blockchain is said to ‘fork’ when there is a change to the protocol, which creates a divergence of chain. This requires, all nodes upgrade their software to ensure they operate on the right chain. Nodes that don’t upgrade, will continue to work off of the old chain, hence the ‘fork’.

 Monero’s hardfork now introduces RingCT (Ring Confidential Signatures)- a far superior and much improved version of the ring signatures, called ‘a multilayered linkable spontaneous anonymous group signature’.  This allows for the transaction amounts, as well as destinations and origins to be hidden. This method is in some ways similar to Zerocash (another prevailing coin), but the difference with Monero is that coin generation is trustless, but with Zero cash it requires 'trusted' pre-generation.

There are many ways to describe today’s Monero, but we can summarise it as: truly trustless, truly fungible, anonymous, decentralised (does not rely on GPU mining), organically scaleable, and private by default and by design.