by Lumai Mubanga
From the moment bitcoins were created, some cryptocurrencies that followed were using almost the same protocols. Many, like bitcoins, transaction privacy was still not implemented to the full even as it still stands today. For instance, when you send bitcoins, the receiver can see your identity as well as the amounts transacted. However, a different set of cryptocurrencies began to emerge. Unlike earlier versions like bitcoins, the term privacy coins was often used. The idea was to focus more on the privacy of transactions and enhanced anonymity. This is what led to the birth of Monero.
This article will explore the early attempts made in search of transaction anonymity, what protocols supported that designs as well as how Monero forked to be what it is today.
Cryptonote is an application layer protocol utilizing technologies designed to ensure greater privacy and anonymity in cryptocurrency transactions. This became inevitable especially after noting that bitcoins and other earlier currencies did not provide that privacy. Thus in 2013, bytecoin became the first byproduct of cryptonotes protocol. However, this currency had a short life span because sooner or later, it was discovered that it had serious bottlenecks despite its advanced feature of anonymity enhancement. It was discovered that it had almost eighty per cent of its coins emitted. This could have pointed to the fact that it was not decentralized and at the same time, it was pre-mined. These were serious and potentially questionable features that led to its early demise.
Somewhere in April of 2014 or earlier, Monero was forked from bytecoin as a result. While it inherited the privacy-enhancing features, developers removed all bottlenecks to make it a real new cryptocurrency with features user may find irresistible. Some of these features include the ability of users to verify their own transactions. This effectively creates a private and censorship-resistant monetary system. In addition, Monero also allows the user to transact without revealing their identity or amounts transacted. It is this anonymity that sets Monero apart from other cryptocurrencies, bitcoin and ethereum inclusive.
Monero, which also mean “coin” in Esperanto is also an open-source as well as a crowd-funded project. This brings to mind the advantages of open source projects. Like many others, it has a core team of developers in addition to other experts who contribute to its design, implementation and innovativeness. The crowdfunding aspect enhances its potential for more public support and acceptance.
As we go deep and deeper into the age of more privacy and decentralization, cryptocurrencies like Monero will probably take the lead in shaping the future of this space. With the potential to minimize scaling challenges and financial support through crowdsourcing, its current price per dollar of $62 and a Market Cap of $1B (2020), will likely improve public perception and wider adoption.