More and more traders are interested in investing in alt coins, virtual currencies similar to Bitcoin. One of the hottest picks right now is Monero, which means “coin” in Esperanto, and offers a level of privacy far higher than that provided by the Bitcoin system. International cryptocurrencies brokers such as UFX.com offer advanced and professional trading platforms, as well as a wide range of cutting-edge tools, that allow traders of all levels of experience to take advantage of the rise and fall of digital currency prices.
The Importance of Privacy
According to its website, “Monero is a private, secure and untraceable digital currency” which has been available since 2014. Some investors think that this definition could also apply to more popular cryptocurrencies such as Bitcoin,but this isn’t entirely true, since the fundamental premise of Bitcoin is that its blockchain allows anyone in the world to access complete records of all previous transactions.
Monero is often seen as an improvement on Bytecoin, from which it originally forked. For the Monero community, one of the most important criteria when setting up the new currency was total privacy.The developers therefore used the CryptoNote algorithm and ring signatures to create a blockchain whereby the sending and receiving addresses, as well as the transfer amounts, couldn’t be linked to any specific user.This represents a real competitive edge over transparent and fully traceable blockchains such as the one underpinning Bitcoin.
CryptoNote and Ring Signatures
As explained by CryptoNote.org: “CryptoNote is the technology that allows the creation of completely anonymous egalitarian cryptocurrencies.” It powers untraceable payments and unlinkable transactions, thanks to ring signatures and one-time keys, to better protects its users by creating a more opaque blockchain.
Ring signatures are based on several different public keys for the verification process to be completed.The “signer of a given message” belongs to a group, and no-one is able to know for sure which member of that group sent the message.
With public addresses, anyone is able to check all your transactions. To avoid that, you can create numerous keys to be shared with your payers. However, you will no longer have a single public address. CryptoNoteoffers “an automatic creation of multiple unique one-time keys, derived from the single public key, for each P2P payment.” A Monero address is a combination of public send keys and view keys, making it impossible to have access to everyone’s transactions.