Bitcoin Has Some Competition as New Online Currency 'Monero' Steps In

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The "dark net" has found an online currency even more secretive then Bitcoin.

Criminals on the dark net have always sought after an anonymous currency to carry out illegal and illicit activity. Cryptocurrency, such as Bitcoin has been the payment of choice for most people who are buying and selling drugs and other illegal items on the dark net.

© AFP 2022 / Stephane De SakutinThis picture taken on June 20, 2014, shows a man placing his phone next to a Bitcoins (virtual currency) dispenser at La Maison du Bitcoin in Paris.
This picture taken on June 20, 2014, shows a man placing his phone next to a Bitcoins (virtual currency) dispenser at La Maison du Bitcoin in Paris. - Sputnik International
This picture taken on June 20, 2014, shows a man placing his phone next to a Bitcoins (virtual currency) dispenser at La Maison du Bitcoin in Paris.

However, although it allows criminals to buy drugs with a degree of privacy, it is also set up to allow every transaction to be traceable on a public ledger called blockchain, which means that if you wanted your transaction to remain secret, it's not exactly ideal.

Alphabay, one of the largest online markets for drugs and other illicit items announced that they will be accepting Monero as alternative payment to Bitcoins, starting from September 1, 2016.

​So why is it that Bitcoin is not as good at keeping transactional secrets as Monero? Well, it appears that Monero is based on CryptoNote protocol, which has significant algorithmic differences in regards to blockchain obfuscation, which is what Bitcoin uses. CryptoNote protocol transitions cannot be traced, which means it does not reveal who sent or received the coins. This feature is missing from Bitcoin.

​Bitcoiners will often use a single wallet address, which means that all transactions connected to it are viewable by anyone. But with Monero it creates a unique address for every transaction, with a private viewkey, which means that the receiver, who has the viewkey can access the full transaction information. In theory, that means nobody can spy on what you buy and transactions remain untraceable by the police.

"It makes perfect sense for the dark net auction site to welcome Monero, it's more secure than Bitcoin since the transaction blockchain of bitcoin can be viewed publicly," said Tyler Moffitt, senior threat researcher for security firm Webroot in a recent interview.

The Bitcoin Foundation have said that Monero is good, but they do believe users privacy can be compromised. The fact that there's still only a relatively small number of Monero users means that any massive transaction will stick out like a sore thumb: there just won't be many others of a similar size to mix with. 

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