CryptoNote – A toolkit for truly anonymous and untraceable cryptocurrencies
CryptoNote was designed as a useful tool to help people separate themselves from the current financial system of total control and surveillance. The ultimate goal of the CryptoNote platform is the widespread recognition of the technology through the development and marketing support of those willing to take on the current financial system. Obviously, Bitcoin is leading the market at the moment; however CryptnoNote, along with the other innovative platforms such as Ripple and NXT, are pushing hard to be acknowledged as new generation solutions. The recently announced CryptoNoteStarter is yet another step on the way to making the CryptoNote technology universally accepted. To launch new CryptoNote-based coins, CryptoNoteStarter will help you through the necessary stages of development. The interface is implemented as a step-by-step guide, starting with preps and finishing off with a block genesis. For more details, please visit https://cryptonotestarter.org
Among the notable cryptocoins created with CryptoNote technology, Bytecoin (BCN) stands out as the first attempt at making anonymous transactions not just a marketing hype but a genuine and usable feature. With its launch in 2012, Bytecoin has been gaining recognition within crypto-community while taking the CryptoNote technology to a whole new level.
While a number of technologies offer an anonymous transactions feature, only a handful of them are actually capable of concealing the parties involved in a transaction. The most prominent of all is CoinJoin. The idea is that several users wanting to send funds co-ordinate their intentions by collating the inputs to their transactions so that a “master transaction” can be built. However, CoinJoin is incapable by design of offering 100% anonymity due the fact that Master Nodes (coordinators for the currency’s payment system) can be compromised by someone with sufficient determination and resources.
CryptoNote, on the other hand, has a proven case of being able to provide untraceable and absolutely anonymous transactions. The centerpiece of the CryptoNote protocol is its ring signature technology. This scheme makes it possible to sign a message on behalf of a group and while it’s clear that a transaction is taking place, nobody will be able to pinpoint the transfer to a specific individual. The CryptoNote protocol also makes it possible for transactions to be untraceable. Payments are split up between multiple one-time addresses that can only be received by the person who has the correct public key. In other words, whoever happens to be watching won’t be able to determine the amount of a transaction.
Many things have been said about the analysis of the Bitcoin’s blockchain. The money flow, wallet balances, the identities of the owners and many other things can be determined easily through this method. The ability to conduct such analysis is due to the fact that all of the transfers between addresses are transparent i.e. every input in a transaction refers to a unique output. Moreover, users often re-use their old addresses, which simplifies the analysis even more. CryptoNote however is designed to mitigate the risks associated with key re-usage and one-input-to-one-output tracing. Every address for a payment is a unique one-time key, derived from both the sender’s and the recipient’s data. Blockchain analysis for CryptoNote-based coins would be confronted with a number of hurdles, since one time addresses with mixed keys in ring signatures would lead them nowhere.
Simply put, CryptoNote offers completely anonymous financial transactions. Those looking to keep regulators’ prying eyes out of their businesses will likely turn to existing CryptoNote-based currencies, or use CryptoNoteStarter to launch their own.