Crypto Academy Week 16 - Homework Post for @levycore

Cryptocurrencies have gone from methods of payment to much more. Decentralization offers transparency with cryptocurrency, but there are digital currencies that can conceal their addresses and transaction records. They are called Privacy Coins. In this post, I'll give indepth explanation on a privacy coin called "Monero".

Monero

Montero is an open source privacy coin. Open source means that it's codes are open, can be modified and used in whatsoever way.

Monero was developed by Nicolas Van Saberhagen on the 18th of April, 2014. This digital currency was created with an egalitarian principle, which means "free for all". Anybody can take part in the mining of the Montero coin without any special equipment like ASIC miner. A normal CPU or GPU can be used for mining Monero. It uses a Proof-of-Work algorithm for it's mining process, and has a block time of 2 minutes.

Each Monero is created without a unique ID. For example, Bitcoin can be traced because each Bitcoin has a unique ID. It is the same as fiat currency. Two $1 dollar bills have the same value, but their serial numbers are different. A Monero unit does not have any unique ID that can link it to previous and current holders.

Monero provides privacy with the use of 3 mechanisms; Ring Signature, Stealth Address, and RingCT.

1. Ring Signature conceals the identity of the sender. A ring signature is generated by combining a sender's keys with public keys on the blockchain.

2. Stealth Address conceals the identity of the receiver. They are addresses that are generated randomly and are used during a transaction, instead of that of the receiver.

3. RingCT stands for Ring Confidential Transaction. It simply masks the amount of digital currency that is being transacted.

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Here are some stats on Monero according to Coingecko:

Property	Description
Price	$276.09
Rank	26
Market Capitalization	$4,953,654,412
Trading Volume	$280,508,487
Available Supply	17.9 million
Total Supply	?
All-Time High	$542.33
All-Time Low	$0.216177
Market Dominance	0.30%

Monero has some hard forks because of its open source software. They are:

• MoneroV
• Monero-Classic
• 0xMonero

Steps in Creating a Monero Wallet

I will illustrate how to set up a Monero Wallet on an Android device.

Step 1: Open the Monero site on your web browser. https://www.getmonero.org/

Step 2: Scroll down. Select "DOWNLOADS".

Step 3: Scroll down to find a suitable wallet type for your device. I scrolled down to the "Mobile and Light Wallets" section and selected Cake Wallet.

Step 4: You'll be redirected to the Cake Wallet site (https://cakewallet.com/). Select "Google Play".

Step 5: You'll be redirected to playstore. Select "Install"

Step 6: Installing...

Step 7: After Installation is complete, select "Open".

Step 8: Accept terms and conditions.

Step 9: Select "Create New Wallet".

Step 10: Input Setup PIN.

Step 11: Pin successfully set. Select OK.

Step 12: Choose Monero as wallet currency and select "Next".

Step 13: Private seed notice. Select "I understand. Show me my seed".

Step 14: Copy and save the seed phrase. Select "Next" at the top right corner.

Step 15: Select "Yes, I have".

Step 16: Wallet has been successfully created.

Reasons for Choosing Monero

When making my research on privacy coins, Monero keeps popping out everywhere. If you google privacy coins, Monero would be the first one listed. So I wondered, what makes this coin so popular. I chose Monero simply because I was curious about its popularity. It has a very good history of securing the privacy of its users. Also, most criminal activities in the crypto space are done with Monero. This also contributes to its popularity.

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^{The screenshots above are both taken from investopedia and medium.com. This is proof that Monero is mostly listed first when Privacy Coins is the topic}

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Advantages

1. Monero offers an easy mining process. Mining does not need any special machine like the Bitcoin ASIC Miner. As a result of this, a simple system like a laptop can handle the mining process.

2. Monero offers total privacy. Your account balance is secured, your spending is secured, etc.

3. Monero has as block size limit of 2 mins. This improves scalability.

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Disadvantages

1. Monero is used for criminal activities because of the total privacy it offers. Illegitimate transactions involving hacking, laundering, etc cannot be tracked on the network.

2. Monero has a bigger transaction size than that of Bitcoin.

3. Monero doesn't have much use cases. Recently, it is only used as a means of payment.

4. Monero faces locational issues. Not all nations support the use of cryptocurrencies, let alone privacy coins. As a result of this, not everyone can use Monero because of geo-location.

Conclusion

In my opinion, Monero is doing more harm than any good it is capable of. The privacy it offers is mostly being misused for illicit transactions. If I didn't know better, I would boldly say that it was developed by criminals for criminals.

Regardless of the bad activities they are used for, privacy coins are actually good innovations. Financial activities are made totally private and nosy people (and government) can finally take a break.

Special thanks to @levycore