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What is Monero (XMR)?

Privacy and anonymity are increasingly important concepts in the cryptocurrency world. While transactions on blockchains like Bitcoin are transparent and can be tracked by everyone, Monero stands out with its privacy-focused structure. Monero (XMR) provides privacy by cryptographically storing both the sender, recipient, and transaction amount in transactions on the blockchain. In other words, in a payment you make with Monero, the recipient and your address, as well as the amount of XMR sent, cannot be known from the outside. In this respect, Monero is also called a privacy coin (anonymous cryptocurrency). All transactions on the network are necessarily private; there is no way to accidentally send a transparent transaction. This feature makes Monero attractive to users looking for anonymity and investors who care about privacy. In order to understand Monero, it is very important to understand its underlying structure and where it comes from. In this guide, we will examine in detail what Monero is, its technical foundations, its development, and why it is valuable. If you are looking for answers to your questions about Monero, care about anonymity and security, or are an XMR investor, this guide will provide you with a comprehensive overview. You will also be able to find answers to questions such as “What is Monero?”, “How does Monero work?”, “What are Monero’s features?”Monero’s Definition and OriginsMonero (XMR) is an open-source, privacy-focused, anonymous cryptocurrency launched in April 2014. The project is based on a CryptoNote article published in 2013 by a person named Nicolas van Saberhagen. The protocol proposed in this article was aimed at making transactions anonymous and untraceable. Monero’s core developers took a fork from the Bytecoin codebase to implement this idea. Initially, this new cryptocurrency was called “BitMonero”; after the “Bit” was removed, the project took the name “Monero”. Monero means “coin” in Esperanto, an artificial language developed by Polish ophthalmologist Ludwik Lejzer Zamenhof in 1887.So, what is XMR coin? Monero is defined as: “Monero is the leading cryptocurrency focused on privacy and censorship-resistant transactions.” It was born on April 18, 2014, by forking the code of Bytecoin. Completely open-source, Monero is built on the CryptoNote protocol. Unlike transparent blockchains, the Monero blockchain uses an obfuscated public ledger. This means that anyone can publish and verify new transactions, but no outside observer can see the source, destination, or amount. In short, transactions made with Monero are opaque; the details of the transactions are hidden by cryptographic methods. Funds sent in Monero are transferred to a one-time stealth address that can only be detected by the recipient’s private view key, not the recipient’s public address. Source: Akash Kandpal/Medium Monero works as a functional digital currency while preserving the privacy of the currency. Miners mine new Monero units, verify transactions, and ensure network security. In addition, the block size and transaction fees in Monero are dynamically adjusted. In other words, the block size can grow or shrink depending on the density in the network. Unlike Bitcoin, Monero offers a coin that is strictly based on the fungibility principle and is not affected by transaction history and cannot be distinguished from each other. In short, Monero is a decentralized, secure, private, and untraceable cryptocurrency.Monero's History: Major MilestonesThe point Monero has reached today is based not only on its technical features, but also on the evolutionary process it has gone through over the years. This project, which was initially an idea put forward by a small and anonymous developer community, has taken important steps in the field of privacy technologies over time and has become a pioneer in the sector. With software updates, protocol improvements, and radical changes in the mining algorithm, Monero has become a project that redefines the standards of privacy-focused cryptocurrencies. Now, let's take a look at these technical and community-driven developments that left their mark on Monero's history.2013: Anonymous software developer "Nicolas van Saberhagen" published an article called CryptoNote. This article proposed ring signatures and other anonymity techniques as a solution to Bitcoin's traceability problem. This idea later became the basis of Monero.2014 (April): An anonymous developer known by the username "thankful_for_today" forked the Bytecoin code to create BitMonero. Later, the "Bit" suffix was removed and the coin began to be called "Monero". Monero's mainnet was launched on this date. Financial privacy was at the forefront when Monero's foundations were being laid.2016 (June): Monero was updated with an update that included ring signatures, stealth addresses, and ring confidential transactions (RingCT). This also allowed transaction amounts to be hidden. With RingCT, transaction amounts were taken behind the scenes and offered as an option for transparency.2017 (January): RingCT functionality was implemented in block #1220516 and was made mandatory for all transactions on the Monero network as of September 2017. This meant that no Monero transaction made after 2017 could be sent without the amount information; the amounts were cryptographically obfuscated for each transaction. This step guaranteed default privacy by distinguishing Monero from other anonymous tokens (such as Zcash).2018 (October): A major software update called “Beryllium Bullet” was in act. This hard fork significantly reduced the size and fee of transactions using a new protocol called Bulletproofs. The same update also increased the Proof-of-Work (PoW) algorithm to CryptoNightV2 and the number of ring signatures to a uniform 11. Bulletproofs reduced the size of RingCT by introducing a zero-knowledge proof (range proof) system for numerical values. This made Monero transactions faster and cheaper.2019 (November): Monero switched to a new ASIC-resistant Proof-of-Work algorithm called RandomX. RandomX was designed to work efficiently with general-purpose CPUs instead of specially designed mining devices (ASICs). This made mining possible on anyone’s computer again, and prevented miner centralization in the network. As of 2019, Monero uses a CPU/GPU-friendly Proof-of-Work that is ASIC-free.2022 (May): Monero’s inflation plan began with “Tail Emission” (permanent block reward). After the first approximately 18.4 million XMR were mined, it was decided to give a fixed reward of 0.6 XMR for each block. In other words, the mining reward in Monero will never drop to zero; new XMR will continue to be created to secure the network. This approach aims to protect the security of the network by motivating miners even if the fees to be earned from transactions are very low.2022-2024: Monero became more accessible to both individual users and the developer community. During this period, with the widespread use and advanced support of wallet applications such as Cake Wallet, Monerujo, Feather Wallet, XMR began to offer a more user-friendly experience on mobile and desktop devices. In particular, Feather Wallet's advanced privacy controls and Tor integration allowed users to take serious steps to keep their online footprint to a minimum.2024: On the other hand, the regulatory pressure from states and regulatory bodies on crypto increased. There were developments such as various regulatory pressures in the US, the European Union's tendency to exclude privacy coins with developments such as MiCA (regulatory framework for cryptocurrencies), and some exchanges delisting Monero. Binance, the largest cryptocurrency exchange by daily trading volume, removed Monero from its platform in February 2024.Today: Although Monero is not loved by governments and various institutions, it continues to be on the radar of many individual investors. Because it is a constantly developing project. The project's Research and Engineering community (Monero Research Lab) is working on new privacy protocols. In 2024, the v0.18 "Hydrogen Helix" version brought speed up Bulletproofs and additional privacy tools. The latest Fluorine Fermi (v0.18.4.0) version was released in April 2025. This update made improvements to network security and performance. As of May 2025, XMR's market value is around $6.35 billion and its circulating supply is around 18.44 million. However, the supply increases over time with additional XMR rewards for each block. Monero's development process has made it a leading player among privacy coins.Why is Monero Valuable?Another issue that is as important as Monero's technical foundations and historical development is the value of this project. Where does Monero's value come from? Monero is unique in the cryptocurrency world not only with its history but also with the features it offers. Especially in an era where privacy has decreased in the digital world and user data can be easily tracked and stored, the anonymity and censorship resistance offered by Monero has become an attractive alternative for both individual users and institutional investors. At this point, in order to better understand why Monero attracts so much attention and to answer the question of what XMR is for; it is necessary to examine the technical and economic elements that make it stand out:Full privacy and anonymity: Monero's most prominent feature is transaction privacy. In every transaction, the sender address, recipient address and amount are stored cryptographically. This puts Monero in the anonymous cryptocurrency category. Whether you send a donation somewhere or buy goods, no one can see who you are sending from and how much money you are sending. Ring signatures, RingCT and stealth addresses provide this. In short, transactions made with Monero are like an end-to-end encrypted message sent to your mobile phone; Only the sender and receiver share the information they need, so your financial privacy is protected. Monero uses three technologies for privacy: Ring signatures, confidential transactions, and stealth addresses. Source: Digital Asset Research Fungibility: Monero does not have a “taint” problem in transactions. Because it is impossible to track XMRs used in any transaction in the past, no XMR can be distinguished from another. This means that the money is fungible. For example, a Bitcoin can sometimes be blacklisted depending on its transaction history. There is no such risk in Monero; every XMR is considered equivalent. As a result, Monero is a currency that is always more likely to be accepted and resists censorship. This feature is an important value for investors and sellers.Security and decentralization: Unlike Bitcoin, Monero uses the ASIC-resistant RandomX algorithm. This prevents huge mining farms that could create a mining monopoly. Anyone can mine Monero with the CPU or GPU on their computer, which helps keep the network decentralized. The network remains secure thanks to advanced cryptography and an active developer community.Dynamic scalability: In Monero, the block size is not fixed; it can increase and decrease dynamically according to demand. During peak hours, blocks grow larger to accommodate more transactions, and shrink when needed. This allows the network to naturally scale. Monero’s flexibility allows transactions to continue even against large data attacks. Moreover, transaction fees are adjusted according to block occupancy. These features make Monero suitable for both high-volume payments and small anonymous payments.Active community and continuous development: Monero is supported by a strong community of independent developers rather than traditional exchanges and institutions. Thousands of developers from around the world have contributed to the project since its inception. Organizations such as the Monero Research Lab work on new privacy protocols, which keeps it up-to-date and increases reliability in the future. Thanks to the volunteer efforts of the community, Monero remains resistant to hacker attacks and censorship.Together, these features make Monero a valuable asset for individuals looking to make anonymous transactions and investors seeking privacy. From a market perspective, XMR’s long-term appeal comes from its limited supply (approximately 18.4 million coins and a permanent block reward) and the increasing demand for privacy. Unlike many other privacy coins (Zcash, Dash, etc.), privacy is default and mandatory in Monero, which some consider to be the most trusted privacy coin.Who are the Developers of Monero?Since its launch, Monero’s development has been carried out by a community of independent and anonymous developers rather than a central institution. However, a few key figures who made significant contributions to its establishment and after can be listed as follows:Nicolas van Saberhagen: The person who came up with the basic ideas behind Monero is an anonymous writer using the pseudonym “Nicolas van Saberhagen”. In his manifesto called CryptoNote, which he published in 2013, he proposed hiding transactions with methods such as signatures and single-use addresses against Bitcoin’s traceability problem. This document became the technical inspiration not only for Monero but also for many privacy-focused coins. Although he did not directly contribute to the Monero code, Monero would not have been possible without this theoretical background from Saberhagen. In this respect, he is considered the mastermind behind the project.“thankful_for_today”: The original ideas behind Monero emerged around the time of the fork from Bytecoin to create BitMonero. The developer who initiated this version, nicknamed “thankful_for_today,” has kept his identity secret. This anonymous person, who implemented the suggestions in Van Saberhagen’s CryptoNote article, laid the foundation for Monero. Riccardo Spagni at the North American Bitcoin Conference. Riccardo “fluffypony” Spagni: South African software developer Riccardo Spagni has long been one of the most prominent figures in Monero. Known by his nickname “fluffypony,” Spagni joined the project in 2014 and was Monero’s lead developer until December 2019. During this time, he organized the community and contributed to many technical papers. Although he stepped down from his active leadership role in 2019, the Monero community appreciates Spagni’s contributions.Monero community and research lab: The Monero core team generally prefers to remain anonymous. Many core developers hide their true identities. For example, there are developers known by their code names such as “Smooth”, “BinaryFate”, “SerHack”, “Howard”, “Luigi”, “ArticMine”. In total, Monero is the third largest developer community after Bitcoin and Ethereum. Groups such as the Monero Research Lab (MRL) provide new technologies with financially supported research. As of 2025, the number of people contributing to Monero is in the hundreds.Other contributors: Many different volunteer software developers have contributed to Monero’s code base over time. These people are usually active in the crypto community and privacy-oriented software developers. For example, Cristian “selenious” Hiesa, ArticMine (Francisco Cabañas), smooth, etc. have brought innovations to Monero features. Many developers do not like to make official statements, but their contributions can be seen on GitHub.In short, Monero was not developed by any company. The project is based on the collective labor of volunteer developers. The ideas for Monero originated from anonymous people and spread around the world. If you ask who developed Monero, the answer will be “anyone who wants privacy”.Frequently Asked Questions (FAQ)Finally, in this section of our article, we have compiled frequently asked questions and answers about Monero.How does Monero provide privacy?: Monero uses three basic technologies together to provide privacy in transactions. First of all, Ring Signatures attract attention. These make it impossible to determine which transaction is real by mixing the transaction with the transactions of other users to hide the identity of the sender. Secondly, there are Stealth Addresses. In order to protect the identity of the recipient, unique and randomly generated addresses are used for each transaction. In this way, the real address of the recipient is hidden and the transactions cannot be linked. Finally, RingCT (Ring Confidential Transactions): It hides the transaction amounts and ensures that the amount sent is seen only by the relevant parties.Can XMR coin be tracked?: Monero's design makes it extremely difficult to track transactions and identify users. Although some companies and government agencies are trying to develop tools to track Monero transactions, no definitive and reliable method has been found so far. However, Monero's privacy features do not mean that transactions are completely untraceable. It is important for users to be careful and follow best privacy practices.What is the difference between Monero and Bitcoin?: Despite being cryptocurrencies, Monero and Bitcoin have significant differences in terms of privacy and transaction structure. Bitcoin transactions are public and traceable; anyone can see the transaction history of a wallet address. Monero, on the other hand, offers privacy by default; sender, recipient and transaction amount information is hidden. Bitcoin's transparent structure makes it easy to track transactions. Monero's privacy features make it extremely difficult to track transactions. While Bitcoin mining usually requires special hardware (ASIC), Monero's ASIC-resistant structure allows mining with standard computers (CPU/GPU).Is Monero legal, in which areas is it used?: The legal status of Monero varies by country. While it can be used legally in many countries, there are restrictions or bans in some countries due to its privacy features. Monero is especially preferred by users who care about privacy. It is used in areas such as online shopping, donations and private payments. However, it is also known to be used in some illegal activities due to its privacy features.Is mining decentralized?: Yes, Monero mining is decentralized. Monero is designed to be resistant to ASIC mining, which allows anyone to mine with standard computer hardware (CPU/GPU). This feature prevents mining from being controlled by large mining pools and makes the network more fair and decentralized.Continue to explore projects like Monero in our JR Kripto Guide series to discover privacy-focused financial freedom.

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