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Vol. 01, No. 20 January 2, 2018 January 8, 2018
Monero Misconceptions: Transparency
The following article was written by special guest contributor u/KnifeOfPi2 for the Monero Observer and its readers. I hope everyone finds it as educational as I did!
Whenever I’ve discussed privacy in cryptocurrencies with people online, I see the same argument over and over: “Why are options bad?”
Optional privacy, as employed by cryptocurrencies such as Dash and Zcash, may sound good, but it presents many issues, too. These coins are actually public by default, with optional privacy. Monero turns this upside down, by making all transactions private by default. But what many people don’t know about Monero is that it actually contains protocols for optional transparency!
Let’s use a simple example to demonstrate why privacy by default, with optional transparency, works better than transparency by default with optional privacy. Bob owns a store that sells pianos, but for tax reasons, he needs to be able to show all of his transactions to the IRS. With a public-by-default currency like Dash or Zcash, this would be easy: he just keeps all of his transactions public, and doesn’t use the privacy features at all. This seems like it would work quite well. But sadly, this presents many issue for Bob’s customers! Consider this situation: Alice, who is very rich, buys a piano from Bob, and sends her payment using an optional privacy feature to hide her wealth from the public. Unfortunately, she accidentally overpays Bob, and he sends her a partial refund. The transaction that Bob sent to Alice is public, and now her address is directly connected to that of Bob’s store. Even though Alice herself sent only private transactions, her privacy can be harmed by a transparent-by-default system.
Because Monero is private by default, it doesn’t have these issues. But it also has the capability for transparency! Monero uses a two-layered system for this. The first layer is called a transaction private key. Each transaction has its own key, owned by the sender, that unlocks the amount and destination of the transaction, but without revealing the address that sent it! So if Alice needs to prove that she purchased a piano from Bob, she can do this without revealing her own address - and her wealth will still be secret.
But what about Bob’s taxes? Now we come to the second layer of Monero's privacy, known as the “viewkey.” This is basically a master key for all of Bob’s payments - it can be given to the IRS to unlock his entire transaction history, so he can prove he’s paying the right amount in taxes. If Bob only gives his viewkey to the IRS, he can prove his transaction history is correct, yet keep his transactions secret from the public! This isn’t possible with a public-by-default cryptocurrency. Another wonderful aspect of viewkeys is that they only affect the address’s owner. Even if you give out your viewkey freely, no one you transact with will ever have their privacy harmed.
So in summary, Monero’s system of privacy by default, with optional transparency, lets you keep your payments completely secret from the world, yet prove them when necessary. This is something that no other cryptocurrency can do.
If you enjoyed this article, please consider donating Monero to u/KnifeOfPi2!
Monero in the Mainstream Media
As a community, we certainly don’t advocate for monero’s use by criminals,” Spagni said. “At the same time if you have a decentralized currency, it’s not like you can prevent someone from using it. I imagine that monero provides massive advantages for criminals over bitcoin, so they would use monero.
Monero Hardware Wallet
BTC Manager reported that after earlier attempts to integrate with Trezor and Ledger Nano, Monero may finally find a hardware home. The privacy-centric crypto team set in motion the development back in August 2017 after raising 996 XMR and have finally released more information at the 34c3 Congress.
X Wallet Update (iOS Wallet)
Bitfury Deanonymizing Bitcoin Addresses
The Bitfury Group announced that they have unveiled a solution for analyzing related Bitcoin addresses, revealing new ways to expose criminal usage patterns. The post highlights that “Criminals are increasingly learning the Bitcoin Blockchain is not the place for them. Having a traceable public ledger of every bitcoin transaction ever conducted allows law enforcement to ‘follow the money’ in a way that would never be possible with cash. Criminals should run, not walk, away from bitcoin.” The full research paper is available here.
Around the Web
- bitGuru featured Monero in an article titled, “Move over Bitcoin, Monero Is the New Criminal’s Cryptocurrency”.
- It was announced on BNN that Monero is being added to Coinsquare, the 2nd largest Canadian cryptocurrency exchange. Skip to the 5:45 mark.
r/brunner7 discussed starting a new project aimed at creating really simply multisig transactions.
- CSNews.io reported that Monero transactions are about to get 80% cheaper thanks to Bulletproofs.
- u/jtoper shared his experiences working with Monero (one month of mining and selling Monero) in a YouTube video.
- Monero was mentioned in a coindesk article titled, “Weathering the Altcoin Storm (And Investing for the Next)”.
Monero was mentioned in Purism’s goals for 2018 post.
- Monero was highlighted in an article about privacy coins by bitcoinist.com.
Monero Mike posted an article discussing Monero vs. Bitcoin.
- Monero Mike shared his thoughts about the future of Monero’s value in 2018.
- u/samair8 posted his Monero price prediction for 2018.
- Chris DeRose discussed Monero on Bitcoin Uncensored at the 41:43 mark (from an episode that appeared on December 27th).
ZDNet.com reported that PyCryptoMiner is enslaving your PC to mine Monero.
- Linux Mint is now accepting Monero donations.
- TV ADDONS is now accepting Monero donations.
u/xmrballons posted an article titled, “Why Monero? – Privacy Focused Cryptocurrency”.
- u/kic0 updated his tutorial on how to run a Monero node over Tor.
- u/humpalumps10 posted a guide on how to buy Monero.
Shopping with Monero
Forum Funding System
- Rehrar’s 2018 Q1 Kovri Proposal - Funding complete!
- Monero Bounty for Hackerone - 85.0% funded
- Monero Tracking Challenge #2 - 52.05% funded
Top 5 r/Monero posts of the last few weeks
- Monero transactions are about to get 80% cheaper and faster.
- Wake up: We need better marketing and better wallets! The best technology doesn't always win (see DVD, VHS, etc.) - Monero needs to be more aggressive about adoption and this early landgrab.
- Finally got around to printing these cryptocards - I know you can use your phone and stuff but I figured for people looking for crowd-funding/donations it could be a cool hand-out!
- Facebook CEO, Mark Zuckerberg, says that he will look into integrating cryptocurrencies into Facebook services
- Linux Mint now accepting Monero donations
Until next time…
Enjoy this webcomic by u/xm-arghhh-pirate
- Vol. 01, No. 20 1/2/18 1/8/18
- Vol. 01, No. 19 12/26/17 1/1/18
- Vol. 01, No. 17-18 12/5/17 12/25/17
- Vol. 01, No. 16 11/28/17 12/4/17
- Vol. 01, No. 15 11/21/17 11/27/17
- Vol. 01, No. 14 11/14/17 11/20/17
- Vol. 01, No. 13 11/7/17 11/13/17
- Vol. 01, No. 12 10/31/17 11/6/17
- Vol. 01, No. 11 10/24/17 10/30/17
- Vol. 01, No. 10 10/17/17 10/23/17
- Vol. 01, No. 09 10/10/17 10/16/17
- Vol. 01, No. 08 10/3/17 10/9/17
- Vol. 01, No. 07 9/26/17 10/2/17
- Vol. 01, No. 06 9/19/17 9/25/17
- Vol. 01, No. 05 9/12/17 9/18/17
- Vol. 01, No. 04 9/5/17 9/11/17
- Vol. 01, No. 03 8/29/17 9/4/17
- Vol. 01, No. 02 8/22/17 8/28/17
- Vol. 01, No. 01 8/15/17 8/21/17
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Monero Observer is a free weekly news publication released every Tuesday, created in an effort to keep the Monero community up to date on all the latest news and developments related to Monero. We aim to achieve this by aggregating all the relevant information into one convenient location in an easy-to-digest format. We sift through the noise so you don’t have to.
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