Monero (XMR) is a peer-to-peer digital money that focuses on privacy and anonymity. Because Monero is fungible, a transaction on the blockchain cannot be attributed to a specific user or real-world identity. This word refers to a currency in which all units are identical and interchangeable with all other units of that currency. While a Bitcoin purchased on the darknet may be identified from a Bitcoin purchased on Coinbase using blockchain transaction analysis, two independent Monero coins seem identical and cannot be separated. Because financial regulators cannot trace XMR payments or gather data on its users, Monero is a very unpopular currency with them.

Even though Monero and Bitcoin have some similarities, however they have many unique aspects to them. The most important is fungibility. To make it simple, fungibility means that you can trade the same thing, in this case crypto, for another person coin. Bitcoin does not allow it. As an example we can put your favourite art piece – it is just one in the world and can not be traded for the same item.

How does it work

Monero depends on two key principles to offer privacy and anonymity: stealth addresses and ring signatures.

For each transaction, a sender can construct a one-time public address on behalf of the receiver using stealth addresses. However, just like Bitcoin, the receiver can use a single public address to receive all of their payments. Every Monero user will be assigned a private view key as well as a private spend key. The private view key will allow users to see all transactions related with their account, whilst the private spend key is used to approve payments, much like a Bitcoin private key.

Ring signatures are a cryptographic term that refers to a digital signature that may be signed by any member of a certain group of persons who have private keys. When you perform a XMR transaction, your Monero wallet creates a ring out of the keys it obtains from the blockchain. Anyone watching cannot detect which key was used to sign, making the transaction anonymous.

Monero introduced Ring Confidential Transactions (RingCT) in January 2017, which also mask transaction values.

History

The CryptoNote whitepaper, a cryptocurrency research paper written by developer Nicolas van Saberhagen, whose actual identity is unknown, was released in 2012. It provided the cryptographic algorithms and offered a new type of electronic currency known as CryptoNote.

Monero does not have a single founder or CEO. A core team of developers is working on it, the most of whom choose to remain nameless. Monero is an open-source project that relies heavily on community donations to support its development. Hundreds of individuals from all around the world have contributed concepts and funds to the project using Monero's Community Crowdfunding System (CCS).

Maximum supply

XMR currently has a circulating supply of 18,147,820 coins. Monero will have a total supply of 18.4 million XMR, which achieved in May 2022, but there is no actual maximum supply since Monero will continue to emit 0.6 XMR each block indefinitely in a process known as tail emissions, in order to keep miners’ incentive to run the network.