What is Monero?

While most cryptocurrencies are focused on transparency and public verification, Monero is all about the opposite: anonymity of the sender, the recipient, and the funds themselves. In researching Monero, the term that kept coming up is “fungibility.” No, it has nothing to do with mushrooms. I checked. Fungibility is the identity of the item itself and whether it affects the value. Say you borrowed $10 from a friend. When you pay them back, you can use a different $10 bill and you’re even Stevens, because in most cases, cash is fungible. Now say you borrowed your friend’s Honda Civic, and when you brought it back, it was a Ford Pinto. Not quite so good right? Cars are not fungible. Now say you brought back the right car, but you had used it to rob a bank and crashed it on your way out. That car is now tainted, and its value is irrevocably diminished. That’s what’s beginning to happen with digital tokens because their entire life story is recorded on the public ledger for everyone to see. If a token was used for illegal purposes, it’s value is thereafter affected. Some merchants can no longer accept them. This will never be a problem with Monero coins, because due to their intense privacy, they are fungible.

Using fancy cryptographic techniques, Monero uses ring signatures and stealth addresses to hide senders, recipients and transaction amounts without sacrificing reliability. Users have public and private keys for sending and receiving, and an additional key can be given to a trusted third party to allow them to view, but not alter, the activity on the account. It sounds complicated, but users only need a recipient’s email address to send funds, eliminating some of the long, complex keys other systems use. An additional innovation is the use of an algorithm that does not require heavy processing power, preventing centralization.