Anonymous Altcoins On The Rise: What Are Bytecoin And Monero And What Makes Them Special?
Bitcoin has this myth around it that it's an anonymous currency - we all know that that's not really true. Yes, it's not like a bank account where your name is clearly stated so there is some level of anonymity, but bitcoin transactions can be traced back to the original sender.
There are actually some cryptocurrencies that are truly untraceable and anonymous: Bytecoin and Monero.
I have started a new series on my Steemit Blog: Introducing Altcoins that are either new or particularly interesting.
My first post of this kind was about Stellar Lumens, a cryptocurrency that started off as a side project from ripple, but quickly became popular by itself too.
This time, let's take a look at the untraceable currencies Bytecoin and Monero!
1) BYTECOIN - THE ORIGINAL ANONYMOUS CRYPTOCURRENCY
Overview
Name: Bytecoin (BCN)
Algorithm: CryptoNight
Market cap: $437,915,948 (Top 9)
Current price: around $0.00239
Launched: 2012
Mission Statement: "Bytecoin is the private untraceable cryptocurrency launched in 2012. Bytecoin is the first enterprise-ready solution."
Bytecoin is often nicknamed the "original" anonymous cryptocurrency.
As you can see, Bytecoin is definitely not new - it's been around since 2012, and 5 years are like a lifetime in the fast-paced world of cryptocurrencies!
But it wasn't until recently that Bytecoin received huge public interest, with market cap and currency values skyrocketing this month.
Bytecoin even managed to climb the Top 9 spot in the ranking of cryptocurrency market caps!
In that short period of time, Bytecoin saw a 5x increase in its market cap, increasing from around $80 million to $400 million, and the daily trading volume increased from $340,000 to unbelievable $48 million.
Take a look at this screenshot of the Bytecoin price- and market cap history - you can clearly see the huge spike from may 2017!
How does Bytecoin work?
Bytecoin uses the proof-of-work algorithm CryptoNight. Due to ring signatures and stelath addresses, its protocol CryptoNote is able to provide transactions that are both totally unlinkable and totally untraceable.
Usually, anyone can check all your incoming transactions of a certain address. CryptoNote makes transactions unlinkable by creating multiple unique one-time keys for each transaction.
A standard CryptoNote transaction is generated by the following sequence covered in the white paper. Bob decides to spend an output, which was sent to the one-time public key. He needs Extra (1), TxOutNumber (2), and his Account private key (3) to recover his one-time private key (4). When sending a transaction to Carol, Bob generates its Extra value by random (5). He uses Extra (6), TxOutNumber (7) and Carol's Account public key (8) to get her Output public key (9). In the input Bob hides the link to his output among the foreign keys (10). To prevent double-spending he also packs the Key image, derived from his One-time private key (11). Finally, Bob signs the transaction, using his One-time private key (12), all the public keys (13) and Key Image (14). He appends the resulting Ring Signature to the end of the transaction (15).
Bytecoin and Bitcoin?
Bytecoin is sometimes confused with a soft-fork of Bitcoin - but that's absolutely not the case.
Bytecoin is its own, independent currency with a totally different technology compared to Bitcoin.
2) MONERO - SECURE, PRIVATE, UNTRACEABLE
Overview
Name: Monero (XMR)
Algorithm: CryptoNight
Market cap: $589,934,213 (Top 8)
Current price: around $40.50
Launched: 2014
Mission Statement: "Monero is a secure, private, untraceable currency. It is open-source and freely available to all."
Monero (originally called BitMonero) is a fork of Bytecoin, released in 2014.
It uses the same CryptoNote technology as Bytecoin and is just as anonymous, but there are a few key differences: compared to Bytecoin, the block rewards from Monero were doubled for each block. Also, there were countless improvements and adjustments made from the previous Bytecoin.
Monero is an independent currency and the developers are probably tired of being compared to Bytecoin, but the similarities can't be overlooked.
Monero is basically the improved version of the "original anonymous cryptocurrency"!
Let's take a look at Monero's price- and market cap development:
There's no doubt about the fact that untraceable cryptocurrencies are on the rise.
There might be multiple reasons for that - but it really seems like many (cryptocurrency) users are more and more concerned with their privacy, and enjoy the benefits of untraceable transactions.
What's your opinion about these totally anonymous cryptocurrencies - do you use or even prefer them?
Cover 1 and 2, Images: 1, 2, 3, 4, 5, 6, 7, Sources: 1, 2, 3, 4, 5, 6, 7
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© Sirwinchester
Really helpful informative post SirWinchester. Thank you for all this. An improv friend was asking me specifically how to get into crypto and about bytecoin. So this helps. Hope you enjoy my latest post as I continue to share steem with friends.
That's awesome, thank you! Glad I could provide some helpful information.
I would prefer to remain with bitcoin still. I think transparency is the better and more sustainable route when it comes to bitcoin. The transparency only makes bitcoin stronger and more secure. A coin like monero could be a breeding ground for corruption, hacking and illicit activities and we would have no way of knowing. Not a good situation to fall into. Just a personal opinion on the subject.
Good point, that's true as well and that's exactly why the FBI is keeping a close eye on Monero.
But then again, cryptocurrency was partly created to enable anonymous payments, so it's understandable that there's a demand for currencies like Monero.
Although bytecoin is the first anonymous coins, it seems that ithas a serious problem regarding premine, most coins are owned by the developers.
Yes, good point, I've read that too. Over 80% of the tokens are apparently pre-mined, which is pretty crazy. I think that's part of the reason why some people have lost faith in bytecoin and switched to monero instead
Yep most likely that means that current capital flight into byte is basically fighting on 20% of whole supply, which is why probably the price went up so quickly and so strong. If developers cash it out that could go down quickly, altough thats just a guess not that i know their intentions.
Great side by side comparison!
The only problem I can foresee with these untraceable transaction coins is that the government may crack down on them harder than others. Only time will tell!
Thank you!
And yes that's true, I actually already read on coinbase that the FBI is afraid people will use monero for criminal activities.
http://www.coindesk.com/fbi-concerned-about-criminal-use-of-private-cryptocurrency-monero/
BCN was almost dead for a long time, and lately we saw 5x increase in its price. Will it crash? Nobody knows.
Yeah it really was almost dead - I was actually surprised when I found out that BCN had been around since 2012, but I'd never even heard of it.
just as an update it crashed lol.
Markets are full of chaos. Especially the markets are crypto-currency. But the fact that the events on the market are, to some extent, random, and the moods and trends can change drastically and in a matter of hours, does not mean that you can not profit from changes in the price of bitcoin prices or altcoin.
Great comparison! What do you think about the recent controversy surrounding the Monero devs?
I think it wasn't right from fluffypony to hype up an announcement like that, only to troll someone else. But still, one might argue that this is his humour and that he can post whatever he wants on his personal twitter account.
In my opinion it was a childish move, but still I don't think it would stop anyone from using or investing in Monero.
Very interesting post. I was not familiar with Bytecoin. I like your graphic with Anonymous, very cool.
I didn't make that one myself, the credits go to cointelegraph, but thank you anyway 😄
I am currently mining bytecoin (with minergate) - it works pretty well with my geforce 1050ti gpu - monero is also an interesting option since merged mining with fcn (fantomcoin) is possible - what do you guys think of the latter?
Love your articles :)))
Thank you, happy to hear that! 😄 I appreciate it!