#AOPS Anonymous Online Payment Systems
Anonymous internet banking is the science of utilizing cryptography to secure online transactions. Today, modern cryptographers are building upon the e-cash idea, suggested by Dr David Chaum — inventor of the blind signature. Blind signatures, when implemented allow users to spend virtual currencies in an anonymous fashion. However, an ideal e-cash system harnesses blind signatures and the public key encryption technologies. Bitcoin and Monero are modern crypto currencies that rely heavily on these cryptographic security primitives.
The Dark Net / Dark Web; is a world of un-indexed internet based websites that operate the global economic underworld. Like the ‘surface web’, it is a platform for exchange of numerous goods, services and information. Moreover, it’s popular for enabling illicit trade of everything and anything; legal and illegal. For instance, Silk Road was the forerunner in the crypto age online black market. Silk Road is synonymous with the online purchase of narcotic drugs using Bitcoin. Lately, Silk Road 3.0 has implemented massive security redesign and upgrade. This shows how the Silk Road team is eager to avail secure and safest dark-net market place even after the arrest and conviction of co-founder Ross Ulbricht.
Since its inception, Bitcoin has been the Darling of the Dark Web, but the two year old Altcoin, Monero, is just about to change that. Monero is rapidly gaining traction amongst Dark Net drug dealers, as researchers work for Bitcoin decriminalization. Monero’s value has more than tripled in the last month as two Deep Web sites, Oasis and Alphabay announced Monero currency integration. With over $100 Million market capitalization, Monero is now ranked seventh largest crypto-currency.
Bitcoin was the first successful decentralized crypto-asset payment system; introduced by pseudonymous developer Satoshi Nakamoto in 2008. Bitcoin transactions are processed and verified by a cyber attack immune network of mining nodes. Thereafter, stored in a distributed ledger is commonly referred to as the Block chain. Bitcoin miners reach consensus on the current ledger status through a proof of work distributed consensus algorithm. However, since Bitcoin’s block chain is public, it is a major hindrance for secure identity protection. Monero, on the other hand achieves user anonymity by mixing multiple transactions together so as to hide user identity inputs. Monero also utilize dual key stealth addresses to hinder third parties from tracking funds recipients.
Monero, like Bitcoin, is an open source crypto currency with keen interest to solve decentralization, privacy and related scalability issues that engulf the crypto currency age. Monero technology has achieved significant contributions towards enabling discrete crypto currency transactions through the introduction of the CryptoNote protocol coupled with modular algorithmic architecture. Similar to Bitcoin, Monero attains distributed consensus via proof of work algorithm; code named CryptoNight. The Monero proof of work algorithm, CryptoNight, is memory hard and AES intensive which narrows GPU mining advantage over CPU mining — significantly boosting its decentralization extent hence favouring anonymous transactions on its public ledger. CryptoNote is the original Monero protocol which utilizes ring signatures with one time keys to guarantee anonymity in transaction origin and destination. Most recently, the Monero Community introduced a Multi-layered Linkable Spontaneous Anonymous Group cryptographic signature that enables transaction amount, origin and destination hiding, with reasonably verifiable, efficient and trust-less coin minting.
Bitcoin and Monero technology are key rivals in pursuit for perfect anonymity in the crypto currency eco-system, their users have the final word in the levels of transaction anonymity they so wish to achieve. Typically, user identity will remain anonymous as long as the account owner works towards maintaining their privacy — pseudonymous users. For instance, publishing an address on internet along with personal details could obviously aid an interested party in monitoring a naïve user.
Cryptographic blind signature and the decentralization technology are the underlying technological principles implemented by Bitcoin and Monero crypto currency systems in their endeavour to preserve user identity. Digital signatures allow for the disguising of transactions before they are transmitted on the p2p network. These cryptographic monetary systems schemes play a key role in maintaining user confidentiality. When implemented on a distributed public ledger (Block chain), such systems are immune to third party interferences hence perfect for anonymous contracts. However, further research in smart mining algorithms allowing transparent CPU mining, will ultimately fulfil Satoshi Nakamoto vision of a true peer to peer currency.
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Originally published at www.priceactionofcryps.com.