An analysis of the SC Decision in RBI Case
The Reserve Bank of India ('RBI') vide Circular - Prohibition on dealing in Virtual Currencies ('VCs') dated April 6, 2018 ('RBI Circular') ...
Monero (also known as XMR) is a cryptocurrency that was originally introduced in 2014 and is sometimes referred to as a "privacy coin" because it was designed with anonymity in mind. Monero (now valued at around $137 USD per coin) uses a technology suite to hide transactions and is widely considered significantly more "anonymous" than Bitcoin and ETH.
It also has a sizable development community and a sizable network of privacy advocates and cypherpunks. Yet, in the eyes of the broader public, Monero is best recognized for its widespread use in illegal transactions.
XMR is accepted alongside Bitcoin on several significant darknet markets, and one of the largest dark web drug shops, the now-defunct White House Market, started exclusively facilitating XMR transactions in late 2020.
Some prominent cryptocurrency exchanges, such as Coinbase, do not accept Monero transactions, possibly as a result of this. Meanwhile, officials in the United States have taken note of hard-to-track cryptocurrencies like Monero, putting the privacy coin under regulatory scrutiny.
“Even if two participants exchange funds in an indirect way, a properly engineered path-finding method will reveal the origin and final recipient,” a whitepaper released in 2013 read about the drawbacks of Bitcoin. This whitepaper ultimately lead to the launch of Monero in 2014 by a group of anonymous developers.
When the FBI successfully breached crypto wallets held by the Colonial Pipeline and Bitfinex hackers by following the transaction trail on Bitcoin’s blockchain, the cybercriminals had to look for an alternative leading to the adoption of Monero.
Bitcoin is the most widely used cryptocurrency today. It operates on a protocol that uses pseudo name addresses to attempt to conceal the participant's identity. These pseudo names are made up of alphabet and number combinations that are generated at random.
However, because both Bitcoin addresses and transactions are recorded on the blockchain, they are accessible to the whole public. Even pseudonymous addresses aren't completely anonymous. A few transactions made by a participant over a period of time can be connected to the same address, allowing others to learn about an address owner's patterns and identity.
Monero features a non-traceable transaction history, making it a much safer network for users who don't want their identity to be revealed even after a set of transactions over a period of time.
Monero uses the concepts of ring signatures and stealth addresses to address privacy concerns. Ring signatures allow a sender to keep their identity hidden from other members of a group. Ring signatures are anonymous digital signatures from a single group member; however, they do not identify who signs a transaction.
The Monero platform uses a combination of a sender's account keys and public keys on the blockchain to construct a ring signature. This distinguishes it as both distinctive and private. It conceals the sender's identity since determining which of the group members' keys was used to create the complicated signature is computationally unfeasible.
Ring Confidential Transactions, or RingCT, also hide the transaction's amount. The RingCT capability was implemented in January 2017 after finding success in masking the identities of senders and recipients. It is now required for all transactions on the Monero network.
The anonymity features offer cybercriminals greater freedom from blockchain tracking tools and mechanisms that are used to track transactions on Bitcoin and ETH..
While Monero's growing adoption is fueled by its privacy, it also comes with a number of drawbacks. For example, the non-traceability and anonymity properties allow them to be used for shady purposes and in shady markets, such as drug and gambling markets. This is one of the reasons why markets like Alpha Bay and Oasis, which were prominent on the dark web, saw increased use of Monero before being shut down.
According to CNBC, hackers created malicious software that hijacked computers and mined Monero before sending it to North Korea. Monero is fundamentally open to being used for illegal activities and eluding law authorities because it is untraceable and operates free of capital regulations.
Monero is a privacy-oriented cryptocurrency that gives users anonymity, unlike others. This means it can't be tracked. This feature, on the other hand, makes it particularly popular on the darknet and for use in certain activities like illicit drug sales and weapon purchase transactions. Another drawback of Monero is it does not offer liquidity as many exchanges have chosen not to list the coin for concerns discussed above.
Monero could be an excellent investment if you're interested in cryptocurrencies. Between August 26, 2020, and August 26, 2021, the value of the currency increased by more than 231%. You may mine Monero with your own computer's CPU, and it works with all major operating systems. We advise readers to do their own research before investing in any cryptocurrency
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