While Bitcoin, Ethereum, Litecoin and Bitcoin Cash make up some of the 'big' names in the cryptocurrency world. One of the undisputed top alternative coins (altcoins) out there certainly has to be Monero.
In the years before it would come to be a name known in infamy, Monero was (and continues to be) a popular coin of choice among technologists and investors with a particular interest in the anonymity that can be provided by crypto assets.
What do we mean by 'infamy'? And why is it that investors and crypto enthusiasts are so enamored by Monero? Well, this is the right kind of place to be digging into what Monero is and why exactly it's such a good crypto for anonymity.
In a World of Crypto's, Secrecy is a Treasure
Contrary to popular belief, while cryptocurrencies do offer a 'better' level of security for their holders, they are not 100% anonymous. Any analyst or cyber-crime specialist with a solid knowledge of cryptography can easily draw a solid red line around all of the transactions that you're involved in.
So what's the solution to this? One of them is Monero. Having been established in 2014, Monero and the creator of its white paper - Nicolas van Saberhagen - place a special emphasis on the security and privacy of its users.
How? Through the process of ring signatures. It sounds very unusual on its own, so let's unpack that phrase. This refers to a kind of digital signature that doesn't belong to just one user. Rather, it's one that is performed by a group of many users, all of which have keys.
To use an analogy - if you're trying to find one users red hat, it's easy when they're on the users heads. But what if you were to turn off the lights in a room, and throw it into a pile of hundreds of red hats?
Ring Signatures do something similar, effectively scrambling up the numerous users addresses, making it far harder to define who signed the transaction. Meanwhile, this validates multiple transactions - effectively obfuscating their transaction information and making it far harder to trace them individually.
Along with these ring addresses, Monero makes use of 'stealth addresses.' These are basically addresses that are randomly generated for each transaction that takes place on the Monero blockchain. Outside observers of a transaction with a stealth address has no true understanding for where a transaction has gone to and from, no-one except the sender and receiver, that is.
So, About the Infamy
It's not every day that we use a phrase like 'infamy' for a cryptocurrency. So why is it that Monero earns this kind of reputation? Well, it's got to do with cybersecurity.
Back in May 2017, any company that was operating using out of date Microsoft Windos OS was subject to a large-scale ransomware attack known as 'WannaCry.'
The attack itself was basically a ransomware cryptoworm: what this did was forcibly encrypt a victims files, before setting a time-lock on them. The user would then be subject to the choice of either paying the ransom in order to release these files, or have them be deleted permanently.
Anyone that was paying attention to the news at that time will be raising a hand here, and you're right to think that. Firstly, WannaCry didn't demand payments in Monero, but Bitcoin. This is true, but whenever these ransoms were paid by victims, they weren't kept as Bitcoin in a single digital wallet.
As we mentioned previously, Bitcoin, much like any cryptocurrency is not 100% untraceable. So what's the best solution for a cryptojacker looking to remain anonymous? Monero.
Any Bitcoin obtained by this attack was summarily converted into Monero, and vanished into the dark web.
To put this into perspective - that's a more frequently occuring practice than you think. Loretta Napoleoni points out that this is actually a practice taken up by terrorist organizations looking to raise funds without eagle-eyed cryptographers paying close attention.