The idea behind Monero is simple: You and I should be able to give money to causes we believe in without anyone else knowing what causes we choose to support.
We should be able to buy and sell things online without anyone else in the world knowing what we bought, who we bought it from, or that we even spent our money.
In other words, we should have complete online payment privacy. And Monero aims to provide it.
Monero has five key features that make it the most secure and private cryptocurrency currently available.
Stealth Address:
The stealth address feature is a huge upgrade over bitcoin’s privacy. Here’s the best way to think of it…
With bitcoin, you reveal your real “home address” in order to send and receive bitcoin. With Monero, you use the equivalent of a “post office box” as your address to send and receive Monero.
By using a virtual P.O. box instead of your actual address, your transactions cannot be linked back to you.
Ring Signatures:
A ring signature is a way to make sure a transaction can’t be tied back to a specific individual. Think about this example…
Imagine a million $100 notes with a thousand fingerprints on each note. It would be impossible to tie the note to a
single person.
As you transact through the network, it mixes the public information of hundreds of transactions together. (Your money is still yours. It’s never commingled with anyone else’s.)
A $100 bill with 100 sets of fingerprints on it and yours is one of those sets. There’s no way anyone can tie that $100 bill back to you. That’s how ring signatures work. With each transaction, digital fingerprints (called signatures) are attached to the transaction… effectively making it impossible for anyone to conclusively prove that the transaction came from you.
Public-View Key
The public-view key feature is what separates Monero from any other privacy solution. You can share your public-view key so other people can see your transactions.
Here’s why this is a powerful feature.
A common knock against bitcoin is that it’s too open. Banks and brokers like the low costs of using a blockchain but are concerned by how easy it is to track transactions. They fear competitors might use that knowledge to poach clients.
At the same time, regulators support banks adopting the blockchain because it makes auditing them easier. Monero’s public-view key feature solves this problem.
It gives banks total transactional secrecy plus complete openness with the regulators via the public-view key. With the public-view key, regulators can view all of the transactions.
Limited Supply
Unlike traditional currency, Monero will have a set coin supply and programmed inflation rate. This ensures that the value of Monero cannot be diluted by endless money creation.
Over the next eight years, the supply of mined coins will be 18.4 million coins. (As of this writing, 14,546,692 coins have been mined.) After eight years, Monero will adopt a 0.86% annual inflation rate.
This ensures a steady supply of coins to compensate miners for maintaining the Monero network.
Built-in Scalability
Another big knock against bitcoin is that it limits the size of each block in the blockchain to just 1 megabyte. As bitcoin has grown, the block sizes have stayed the same. This has caused the bitcoin network to slow down. It just can’t handle a lot of transactions at once.
For instance, the Visa payment network can handle up to 56,000 transactions per second. By comparison, bitcoin can only handle seven per second.
Monero has no such preprogrammed limit. It’s designed with a “look-back” window. That means the network reviews the preceding transactions and automatically adjusts the size of the blocks to account for transaction volume.
That makes Monero scalable. And that means as more people use Monero, it will be able to grow quickly.
Those 5 features will help make Monero a must-use digital currency for those who value their financial privacy and freedom.