Monero For Beginners 7
Monero For Advanced 7
Monero Quiz 1
In order to understand how cryptography works, we first have to look at the ring signature and see how they help to maintain the sender’s privacy. For example, if you are sending someone a check, you have to sign it and because of that, everyone is able to see your check and will know how your signature looks like so it can be seen who sent it.
So now, imagine you pick up 4 people that you don’t know and you merge your signatures with these unknown people and you create a unique signature. This way, no one can find out whether it was your signature or not.
Suppose that Mark has to send 1000 XMR to Josh, Mark has to determine the ring size which is a random output that is taken from the blockchain which is of the same value as the output of 1000 XMR. The bigger the ring size, the bigger the transaction and transaction fees. Mark will sign these outputs with the private spend key and will send it to the blockchain and he also doesn’t have to ask the owners of the previous transactions for the permission to use the outputs. However, this way we won’t know you the sender is. also, it is important to prevent double-spending.
So suppose that Mark was to send 1 bitcoin to Josh, he sends the same coin to Alice, the miners will put it in one transaction in the block and in the process will overwrite the other one that will prevent double-spending. This is possible only if the miners can see that the inputs of the transactions are. Every transaction in monero comes with a unique key image and since the key image is unique for every transaction, the miners can check it out and see where the Monero coin is being spent.
One of the biggest USP of monero is its transaction unlinkability which means that if someone sends you 200 XMR, nobody will know where the money is coming from. If Mark sends Josh some money, only Mark will know that Josh is the recipient. Bob has 2 public keys and the public view key and the public send key. For the transaction to go smoothly, Mark’s wallet will use Josh’s public view key and the public spend key will generate a unique one-time public key. Are we getting closer to understand what is cryptography?
The computation of this one-time public key generates a one-time public address that is called ‘’stealth address’’ where Mark sends Josh his coins. Now, how is Josh going to unlock the coins from the random distribution of data? The private spend key will help Bob scan the blockchain for the transaction and he can calculate the private key which corresponds to the one-time public key and retrieve his Monero.
Now we have seen how the spender will be kept anonymous and we saw how the receiver is also kept anonymous but what about the transaction? To address this issue, Ring CT was implemented which was based on the research done by Gregory Maxwell. It works by hiding the transaction amounts in the blockchain and this also means that any transaction inputs don’t have to be broken down into known denominations that a wallet can pick up ring members. Explaining how cryptography works is quite confusing but that’s what makes this cryptocurrency special.