XMR is the native cryptocurrency of the privacy-focused blockchain network Monero
. Monero was introduced in 2014 on the Bitcointalk form
by a user named “Thankful_for_today” as a fork
of Bytecoin. Today, Monero is an open-source
project maintained by a decentralized developer community.
Monero is a privacy-focused, censorship-resistant blockchain that enables anonymous transactions for users of its cryptocurrency, XMR.
XMR is an inflationary asset and issues tokens based on two schedules. The first is called the “main emission curve” and the second is called the “Tail emission curve.”
During the first stage (main curve), 18.132 million XMR tokens will have entered circulation by May 2022. After that, the system will be replaced by the tail curve
issuance schedule whereby 0.6 XMR tokens will be released into circulation with every new block discovered. Monero blocks are discovered every two minutes regardless of how many miners are participating.
Monero uses the RandomX proof-of-work
algorithm, which was developed by Monero community members to prevent application-specific integrated circuit (ASIC) mining equipment dominating the network hashrate. ASIC miners are capable of producing significantly higher hashes per second than laptops and other ordinary devices used by Monero miners. The equipment gives their owners an unfair advantage over other miners.
Like most cryptocurrencies, Monero price didn’t reach its first peak until January 2018, right around the time all other assets in the market were experiencing huge surges in price. XMR topped out at $469 before dropping to $37 by the end of the year. From March 2020 – when the coronavirus pandemic was first announced – to May 2021, XMR price went on a significant bull run, climbing 1,886% to a new all-time high of $517.62.
How does XMR work?
Monero was introduced in 2014 as a fork of Bytecoin, but advanced by the privacy and security features of CryptoNote
technology. Monero follows the philosophy of privacy by default and embodies principles of decentralization and security.
XMR transactions are made anonymous and untraceable using “Ring Confidential Transactions,” or RingCT, which was created
by Shen Noether in 2015. The technology requires a multi-layered, anonymous group signature that allows for hidden amounts, origins and destinations of transactions with reasonable efficiency.
In addition to RingCT, Monero also uses stealth addresses to add further protections to user privacy. Stealth addresses are randomly generated, one-time addresses used by recipients to receive payments to shield their unique address on the blockchain. When a sender sends XMR to a recipient’s stealth address, the incoming payment is then routed to the unique public address instead. Stealth addresses assure that a user’s wallet address is never published on the blockchain.
Not only do the wallet addresses and transactions between users limit traceability, but those features are maintained within the XMR token itself. That is because Monero included fungibility as a feature of its token. Fungibility refers to assets that can be interchangeable and indistinguishable from other assets in the same class. This makes XMR similar to cash: If you borrow a dollar today, you can return a different dollar tomorrow without a problem.
While bitcoin and other cryptocurrencies can also be considered fungible assets, Monero goes further by obscuring the transaction history of all XMR, making all tokens equally indistinguishable.
Key events and management
The fork of Bytecoin in 2014 was called Bitmonero (BMR). Bitmonero cloned Bytecoin to take advantage of its privacy-focused CryptoNote cryptocurrency protocol. The CryptoNote v1 white paper
was published in December 2012 by a group of unknown developers, but was later verified by cryptography and mathematics professors and professionals.
Bitmonero forked Bytecoin following the discovery
that the Bytecoin team had premined 80% of the tokens’ total supply. Although the Bitmonero launch was successful, the community complained that it rushed the launch of the project and failed to account for the community push for a shallower distribution
, longer block times and an infinite inflation mechanism. Five days after the launch of Bitmonero, a new community-led fork of Bitmonero was created and called just Monero.
Monero is maintained by a mostly anonymous group of developers, although software developer David Latapie and crypto developer Riccardo Spagni (“Fluffypony”) are publicly known contributors to the project. Fluffypony was the CEO of XMR wallet MyMonero and the lead maintainer of Monero for five years starting in 2014. He stepped down
from his leadership role, and the title of lead maintainer was given
to Monero contributor Snipa by the Monero core team.
In July 2021, Fluffypony was arrested
in Nashville, Tenn., for failing to appear in court on charges that he stole $100,000 from his former employer in South Africa using fraudulent entities. As of November 2021, he was awaiting extradition to South Africa, but has called the arrest a misunderstanding.