Please provide a short (approximately 100 word) summary of the following web Content, written in the voice of the original author. If there is anything controversial please highlight the controversy. If there is something surprising, unique, or clever, please highlight that as well. Content: Title: Mastering Monero: The future of private transactions [pdf] Site: First edition MASTERING MONERO The future of private transactions SerHack and the Monero Community NOT FOR SELLING ONLY FOR PERSONAL USE 2 Credits Content • 4matter • Amichateur • Anonimal • ArticMine • Cryptochangements • dEBRUYNE • Isthmus • Midipoet • moneroexamples • QuickBASIC • Rehrar • Sarang Noether • Xeagu Designers • Gustaf Baltsar Garnow • TheMonera Illustrator • Andrés Fernández Cordón Publisher • Justin Ehrenhofer Editor • UncagedPotential 3 4 Mastering Monero is made available as a free digital resource through the generosity of Monero FFS donors. The author and community have invested over 2100 hours into crafting this book as a helpful guide for both novice and experienced Monero users. We hope that you find this reference to be valuable and share it widely. License for the content : Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) License for the cover : Attribution-NonCommercial-NoDerivatives 4.0 (CC BY-NC-ND 4.0) License for the images : Attribution-NonCommercial-NoDerivatives 4.0 (CC BY-NC-ND 4.0). International International Published by LernoLibro LLC. First edition: December 2018. This free PDF was released on Monero's 5th Anniversary, 18th April 2019. Mastering Monero is an extensive community effort, and such lengthy resources are likely to contain mistake(s). If you find any technical issues or grammatical/spelling mistakes, please report your finding to: NOT FOR SELLING ONLY FOR PERSONAL USE 5 Table of Content 5 Preface Writing Mastering Monero 10 Chapter 1 Introduction to cryptocurrencies & Monero 33 Chapter 2 Getting started: receiving, storing and sending Monero 56 Chapter 3 How Monero works 73 Chapter 4 The Monero network 105 Chapter 5 A deep dive into Monero & cryptography 142 Chapter 6 Community and contributing 151 Chapter 7 Monero integration for developers 182 Chapter 8 Wallet guide and troubleshooting tips 198 Glossary 6 Writing Mastering Monero Preface About the author Monero contributor, and the author of this book. Finding I am Nico (“SerHack”), an Italian security researcher, a good resources and learning about cryptocurrencies can be a daunting task. For new users, it can be especially challenging to track down documentation written at an understandable technical level. When I first started learning about Monero, I had to spend a great deal of time seeking out and evaluating many different re- sources on the topic. I decided to write Mastering Monero to guide you along this jour- ney, whether you're setting up your first wallet or curious about the 'under the hood' technical details. The first few chapters are written for anybody curious about why and how to use Monero; they contain easy-to-understand explanations and examples, alongside instruc- tions for practical use. Later chapters progress into more advanced topics, compiling information for developers who wish to build and contribute to the Monero ecosystem. My adventure into the world of cryptocurrencies began when I learned about Bitcoin in January 2016, and I was always concerned about the ramifications of its transparent public ledger. Since Bitcoin and most other cryptocurrencies are built around openly-linked addresses and coins with clear histories, transactions often inadver- tently expose users' personal financial details. Every address balance is public information, which allows anybody to research income, spending habits, and amount of cryptocurrency wealth. This can 7 lead to undesirable consequences, such as price manipulation based on wallet balance. I thought that Bitcoin was the only cryptocurrency until a friend introduced me to Monero in May 2017. I was blown away by its beautiful new paradigm: a world where vulnerable details such as account balances and transaction amounts are kept confidential to protect both the sender and the receiver. With privacy features implemented by default and always required, the entire Monero blockchain is veiled; users do not even have the option to accidentally send revealing transactions. Recognizing the importance of this project, I began looking for ways to contribute to the community. I quickly saw an opportunity to support mass adoption by building payment gateways for online businesses, so I spearheaded the Monero Integrations project. This open-source codebase is designed around Monero's privacy-centric mentality: no signup or third-party service is required, since funds are routed directly to the recipient's wallet. The Monero community was very supportive throughout this endeavor, and the entire project was crowdfunded by donations through the Monero Forum Funding System (FFS). While working on the Monero Integrations project, I learned that the lack of a comprehensive guide to Monero was an obstacle for end users and prospective contributors. This need for a thorough guide inspired me to write Mastering Monero as a universal resource for our global community. I am grateful for the generous FFS support that has made it possible to publish this document as a free eBook (and physical book!) for the general public. Whether you read Mastering Monero cover-to-cover or jump through sections pertinent to your 8 questions, I hope you enjoy learning about Monero and the exciting projects within the community. How this resource is organized The first two chapters of this book are friendly non-technical intro- ductions to key topics and skills. For readers curious to learn more about behind-the-scenes details, chapters 3 and 4 contain conceptual non-mathematical explanations of Monero's privacy features and blockchain. Later chapters dive into complex technical details for understanding, developing, and integrating Monero. The first chapter (Introduction to cryptocurrencies & Monero) is an general-audience non-technical introduction covering key ideas and concepts about blockchains and cryptocurrencies (appropriate both for newcomers and current users wishing to read more about Monero's principles). We'll cover the history and basics of crypto- currencies, and describe how using blockchain technology resolves several problems present in the traditional mainstream financial systems, especially banking services. Unfortunately, there are priva- cy weaknesses endemic to most cryptocurrencies - we'll discuss the personal implications of these drawbacks, and learn how Monero mitigates these risks and protects your sensitive financial information. The second chapter (Getting started: receiving, storing and sending Monero) is your handy guide for all the practical skills and tools that you'll need to use Monero yourself! We'll explain some necessary lingo, and learn about the 'pros and cons' of types of wallets. You'll learn how to make your first wallet, and you can even use the Mas- tering Monero example wallet for practice! 9 In the third chapter (How Monero works), we'll discuss Monero's four main privacy technologies: RingCT, ring signatures, one-time (stealth) addresses, and Kovri. These are friendly explanations with no use of math or code, so you can learn conceptually how each feature works, and what benefits they provide. The fourth chapter (The Monero Network) conceptually describes how Monero's network and miners processes transactions onto the blockchain. We'll discuss miners' incentivization (block rewards + fees), and the services that miners provide (confirming transaction and securing the decentralized and trustless network). We'll also introduce the “hot topic” of specialized mining equipment, and describe the Monero community's relevant egalitarian philosophy and active countermeasures that have been taken to resist ASICs. While the preceding chapters have focused on learning how to use and conceptualize Monero in practical and intuitive ways. The remainder of the book will dive deeply into the internals of Monero, its mathematics, and its code. If you choose to tackle these advanced topics, you will truly be “mastering” Monero! The fifth chapter (A Deep Dive into Monero & Cryptography) leads a technical deep dive into the privacy technologies covered concep- tually in chapter 3. This study moves pass the analogies, into the actual mathematics and specifications of Monero's enhanced version of the CryptoNote protocol. The sixth chapter (Community and Contributing) contains infor- mation for anybody that is interested in contributing their time and skills to help the Monero community. Whatever your strengths, there 10 are opportunities to contribute - you could help with translations, outreach, code development, applications, or in many other ways. The seventh chapter (Monero integration for developers) discusses payment option, and useful methods for conveying addresses through OpenAlias (human-readable) and the Monero URI (machine-read- able). Developers for merchant payment options, learn about gener- ating simplified addresses through OpenAlias. Developers will learn how to interact with the Monero blockchain via remote procedure calls (RPC) to the Monero daemon, and a Python implementation is included to teach how basic tasks are executed. The eighth chapter (Wallet guide and troubleshooting tips) contains miscellaneous information for setting up a graphical (GUI) or termi- nal-based (CLI) wallet along with troubleshooting tips for common problems. 11 Introduction to cryptocurrencies & Monero Chapter 1 Maria is purchasing a car from George, and in this chapter him: traditional banks, transparent cryptocurrencies (e.g. we'll consider three different ways that she could pay Bitcoin), and Monero. 1.1 Payment through banks Figure 1.1 - Maria sends money to George through the traditional banking system. 12 If Maria sends the money to George through the traditional banking system, they trust two intermediate parties (their respective banks) to symbolically move the funds for them. There is no actual movement of physical bills or assets; both banks simply edit their respective databases to show that the funds have been transferred. When Maria submits the transaction to her bank (whether by wire transfer, her bank's website, or an app), her bank subtracts $2,500 from her account balance on their ledger, then contacts George's bank and requests that they add $2,500 to George's balance. There are a few drawbacks and risks to this system, and it requires total trust in the banks. Maria, George, and the banks must act on faith that transactions are legitimate and that the ledgers are kept honestly. This trust in the intermediate third parties poses a risk, since a nefarious actor or the banks could “create” money by fraudulently editing the ledger balances or transaction database. Furthermore, Maria does not actually have possession of $3900, only an IOU from her bank that she must trust is redeemable. She has no way to audit her bank to verify whether they actually have $3900. In fact, they may not hold that much, since most banks legally operate on fractional reserve - meaning that their actual assets are allowed to be significantly less than the total balance promised to account owners. Depending on how the funds were sent, it could take anywhere from minutes to days before the $2,500 shows up in George's bank account. Since George is not privy to the banks' ledgers or commu- nications, the entire process is opaque and cannot be monitored. 13 Many people that have not personally experienced economic disruption take functioning banks and the validity of their IOUs for granted. Few individuals consider the unsettling ramifications of handing their lifelong savings to opaque corporations, often putting all their eggs in a single institutional basket. Losses can occur due to: • negligence (the bank makes a mistake) • financial issues (the bank overextends their assets or goes out of business) • malice and corruption (the bank or a rogue employee steals your money) • hostile third parties (the bank is robbed or a hacker thieves electronic funds) Thankfully, an emerging new blockchain technology is capable of