When we were usually supposed to talk about blockchains, we got used to the fact that they are open, contain public information and, well, generally everyone knows everything. However, there are projects that are the opposite of these fairly common features of blockchains. One of these is Monero, about which we will say a little today.
The public blockchain infrastructure offers many advantages, as I mentioned earlier, we are able to verify transactions and therefore information. On the other hand, private blockchains, so to speak, offer something different. For people who want more financial confidentiality, such blockchains are like godsent. And the most popular token with such a solution is Monero and its blockchain.
It is a cryptocurrency built with a guiding idea. Make it impossible to link and search for addresses and transactions as much as possible. It is impossible to link two transactions together using Monero. This is a recognisable feature of Monero, the cryptography encrypts our activities so much that you don't know who sent what money from where.
Things that are related to Monero are ring signatures and hidden addresses. These two innovations form the whole basis for Monero's anonymity. A ring signature is a digital signature created by someone in some specific group. By providing the signature and the public key of a member of this group we can check if one of the group created this signature but we cannot tell which one exactly. This works in such a way that when creating a transaction we ensure our anonymity because our wallet takes the keys of other users and creates a ring from them. This is the simplest deception. In this way, third parties are not able to check the actual sender. The number of fake transaction sources is called decoy, mixin.
A hidden address, on the other hand, works by creating a one-time unique address based on a public key that will only be used for that transaction. So if we see a public address, we won't link any transactions to it, because the money was just sent from this hidden one-time address.
Users can propose changes through the Community Crowdfunding System. If the idea is selected by the community, they go into the crowdfunding period. When a suitable threshold is reached, the project is implemented and the funds are given to the developers.
