What is Monero?
Monero is a cryptocurrency that was launched in 2014 and whose mission is to protect and enhance the privacy of its users. Monero is not based on a transparent blockchain like other cryptocurrencies, but on a blockchain that supports and ensures the anonymity of its users. The blockchain works with the proof-of-work mechanism, where miners confirm the transactions. However, there is no maximum block size and new blocks are formed every 2 minutes, which supports fast transactions and low transaction costs.
How does Monero work? And what makes the currency secure and anonymous?
Monero works with some unique principles, which conceal the identity of the sender, the amount being sent, and the identity of the receiver from everyone during a transaction.
The ring signature protects the identity of the sender. She is formed from the sender’s digital signature and the signatures of other users from previous trades. Any of the users whose signature is involved in the ring signature could be the potential sender to an outsider without the ability to identify the real sender.
Ring Confidential Transactions, or Ring CT, conceals the transaction amount. This principle was introduced in 2017. The transaction amount is converted into a fictional amount that appears like a random number, but at the same time makes it possible for the systеm to check the sums sent, received and available sums of XMR, and make it impossible to send more Monero than you have or to send the same amount more than once.
Stealth addresses protect the identity of the recipient. The sender can generate a one-time public key from the public-view key and the public-send key of the recipient’s Monero address. This one-time-public-key is then used to make a one-time payment to the recipient without making his Monero address visible. Only the wallets of the sender and receiver have the ability to prove that the transaction between the addresses has taken place.
How do I use Monero safely?
Complete anonymity is not automatically guaranteed.
With these 3 tips, you can increase your security tremendously.
If you send even amounts and split your amounts, it will be hard to track transactions. For example, if you buy an odd amount of XMR at an Exchanger and then send it in full to another address, it could be seen from the outside that these transactions are related. However, if you resend your amount over multiple transactions, no one can see that your exact amount was resent. Using even amounts has the advantage that with many transactions in the Monero network, your amount will not be noticed.
Another recommendation is to use the official wallet GUI of Monero. In doing so, you need to download the entire Monero Node to your device and download the new transactions every time you restart the wallet. This wallet is like a cold wallet for your XMR and your transactions. With remote nodes, theoretically the operator of this service can see your transaction data. You can prevent this by saving your own transactions.
Also, in most wallets you have a main address and a sub address. The main address is always the same and starts with a 4. The sub address starts with an 8 and changes every time you receive XMR there. It makes sense to use the sub-address for privacy reasons, because it varies and you cannot be recognized by exchanges or users by your address.