Today we will cover the virtual asset Monero (XMR). It is a confidential and secure alternative to the Bitcoin cryptocurrency. At first glance, it would seem that these characteristics are quite suitable for digital gold tokens as well, but the Monero blockchain ecosystem, uses a completely different type of cryptography to ensure payment anonymity.
Why was this necessary? Not all users were happy with the transparency of the first cryptocurrency Bitcoin’s network and this prompted developers to create truly anonymous digital coins.
Monero is a cryptocurrency and decentralised blockchain ecosystem powered by the RandomX protocol. The Monero cryptocurrency uses a one-time ring signature algorithm to perform anonymous transactions. The developers took the name of the digital currency Monero from the international language Esperanto. Translated into Russian, the word means coin. Its official ticker symbol is XMR. The cryptocurrency Monero is a fork of the blockchain project Bytecoin. Since 80% of Bytecoin, at the time of its launch, had already been distributed, the team launched the reissue of XMR coin.
History of the creation of Monero (XMR)
Whitepaper was published in 2012 by a group of anonymous blockchain architects hiding under the pseudonym Nicolas van Saberhagen. The CryptoNote protocol framework was developed 10 years earlier by cryptographers Ron Rivest, Adi Shamir and Yael Tauman.
The first CryptoNote-based crypto network called Bytecoin was launched on US Independence Day – July 4, 2012. Bytecoin features the EdDSA ring signature system, created by Professor Daniel Bernstein of the Technical University of Eindhoven. An obfuscation method based on the generation of one-time keys is used to increase the anonymity of transactions. Two years later, the lion’s share of Bytecoin tokens had already been mined and distributed, threatening the network’s existence. Then entrepreneurs Ricardo Spagni and David Latapi, along with a group of developers, released a fork of Monero that changed the issuance structure and mining process of the cryptocurrency.
A few months later, the coin’s network was subjected to a massive hacker attack. The attackers were not successful, but thanks to this event, flaws in the system’s core became apparent. The project team started fixing the vulnerabilities, which delayed the release of MyMonero cryptocurrency for almost 3 years. The developers want to stop ASIC miners from intervening at all costs, so Monero’s algorithm has already been changed twice.
The last time, in spring 2019, the coin switched to Cryptonight R, and the next switch, now to the Random X algorithm, was made in autumn. After that event, Monero pools stopped cooperating with owners of gpu mining farms, or rather, video card miners themselves refused to work with this altcoin due to a complete lack of income. XMR mining is profitable only on PC CPUs.
Features, technical features of Monero (XMR)
The Monero blockchain is protected by the Proof-of-Work consensus algorithm. XMR cryptosystem uses technological innovations:
Floating block volume of information. The signed block must be a minimum of 1 MB, but the average is about 8 times larger. The cryptographic protection of the network uses the adaptive Scrypt feature. It is designed specifically to protect against tampering by direct enumeration of values on integrated circuits;
Auxiliary hash functions Grostl, JH, BLAKE and Skein;
Transaction processing uses x86-64 mode;
AES command system extension for x86 microprocessors.
This set of options ensures that the Monero cryptocurrency is as decentralised as possible, making industrial mining devices inefficient. However, some of Monero’s forks such as Karbo, Dero and Discoin have long been under Asics’ control.
Monero’s encryption system is very sophisticated and, unlike DASH or ZCash e-currencies, is built right into the blockchain. The owner of an XMR wallet can adjust the degree of anonymity of the transaction performed by increasing the size of the fee. When transactions are processed, all the data is intermingled and as a result it is virtually impossible to trace the transfer, it has references in many previous transactions. The money is sent to a one-time public address, which the system generates using the sender’s crypto address and a randomised public key. An outsider will see transactions from different wallets to the same person as being sent to multiple addresses, guaranteeing confidentiality.
In addition to the public address, a payment ID is needed to make a transfer in the Monero network. It looks like a 16-character string that is entered in a field separate from the address. The ID is created by the recipient of the funds to confirm the legitimacy of the transaction. Many crypto-exchanges use integrated addresses, in which the payment identifier is connected to the public key, for customer convenience. The deposit has both an integrated address and a regular address with a payment ID.
Monero (XMR) Nodes
Each fat monero wallet serves as a network node, but if you don’t have the ability to upload the entire blockchain to your hard drive you can connect to a remote node. A list of available nodes and instructions on how to connect can be found at https://moneroworld.com/#nodes.
There are monero clients where the private view key is stored on a remote server. In such wallets, the system keeps the wallet in sync with the blockchain when the user is offline. When money is spent, the server generates a transaction on the client’s request, and the wallet owner signs it with the private spend key and sends it back to the server, which transmits it to the network.
How to mine Monero coin (XMR)?
In the autumn of 2019, a hard fork took place on the Monero network, after which the coin became mined by RandomX. This was done to protect this blockchain ecosystem from ASIC miners, but by and large gpu rigs owners and especially those running AMD Vega graphics cards were just as affected.
Of course, XMR is not the only one, but alas, one of the most profitable and “cold” crypto-currencies for amateur mining on graphic adapters stopped being profitable at once. And it seems that RandomX algorithm, as some sources claim, is optimized for CPU and GPU mining. But if we look at hash rates of top graphics cards using this protocol, it becomes evident that it is designed for CPUs and video cards are just on the side of the coin.
Let’s take the top AMD Ryzen 9 3950X cpu and video card AMD Vega 64 or one of the best mining model Nvidia RTX 3080 and see how many hashes each of these processors can give at RandomX.
Numerous tests have shown that AMD Ryzen 9 3950X CPU can be overclocked up to 19,5 Kh/s, Vega graphics card gave out only 1,16 Kh/s, and super modern and expensive RTX 3080 as much as 1,5 Kh/s. What kind of speed is that for a top-of-the-range video adapter?
If you mine Monero on graphics cards with such a hash rate, you will simply stay in the black, not being able to pay for electricity even at the cheapest tariff in the RF. That said, the AMD Ryzen 9 3950X CPU costs around 15,000 roubles less than the Nvidia RTX 3080 and consumes around two and a half times less power. It will be able to earn about $1.5 “net” on Monero per day and you’ll be able to enjoy complete silence.
Of course, the payback period of this cpu is quite long (about two years). But you can use for mining not all of the 16 cores, but, say, half and earn money while you surf the World Wide Web or use your computer for other tasks.
To mine Monero suitable and cheaper CPUs, but best on this algorithm proved itself hardware series Ryzen. You can find a suitable pool on the monitoring service https://miningpoolstats.stream/monero. The choice is pretty wide, more than thirty services are mining XMR, but 51% of all network power is controlled by two most powerful pools – minexxmr.com and supportxmr.com.
Monero (XMR) coin purchase and sale
XMR has good liquidity and is exchanged for other cryptocurrencies or fiat currency at 70 exchanges. These include:
- Huobi Global;
The main trading pairs: XMR/BTC, XMR/ETH, XMR/USD, XMR/BUSD. Clients of the exchange Binance can buy and sell digital currency monero for rubles.
To work on the exchange, you need to create an account, the order of registration on each of the platforms is about the same.
Specify an email and password.
Confirm the email address and sign in to the exchange.
For security purposes it is recommended to immediately activate 2FA, while on some exchanges this is mandatory. Then you open a deposit, deposit the cryptocurrency and execute trades. When choosing an exchange, pay attention to XMR rate, as it can be different on different exchanges, as well as to the minimum deposit and withdrawal threshold. You can make financial transactions on a crypto exchange using traditional money only after verifying your identity. To do so, you will need to provide your passport details, upload scanned copies of your documents and take selfies. The verification can take up to 48 hours.
If XMR cryptocurrency is so anonymous, then how can you check its transactions? It’s simple – the software will not be able to create a one-time key if you put more money than you have in your balance. The key is checked by the nodes for uniqueness and if no match is found the transaction will be executed.
Talking about Monero cryptocurrency, it is a favourite of hackers. A hidden miner that is easy to pick up and very difficult to withdraw mines exactly XMR. The developers have even created a Monero Malware working group, which has detailed instructions and special software to remove various types of malware on its website.
Such is the side effect of cryptosystem anonymity. The developers of Monero are often accused of making the coin popular with black market dealers. Overall, it is a fairly balanced digital asset for anonymous payments with minimal fees. You can mine XMR coin between jobs on a personal computer.