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| post | Cryptocurrency | Introduction to Cryptocurrency terminology |
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Monero project offers a decentralized and anonymous open-source cryptocurrency with a regular update cycle that does not limit the user to use certain software or hardware. With such an open approach, it is often difficult for users to keep up and be aware of many choices on the client side, that can be either good or bad for them. As cryptocurrency usage is rising in general, it is also more and more frequent to encounter malicious sites or software developersthat aim to take control over users funds to gain an easy profit. This thesis focuses on the Monero usage and mining from usable security view to explain the current state in the Monero ecosystem and reflect the real-world usage data from both users and miners surveys. The goal of this thesis is to map usage habits of Monero cryptocurrency users and miners from both technological as well as security view. Another goal is to create a detailed user guideline for user-friendly and secure usage of the Monero cryptocurrency including key management and backup strategy. For miners, the goal is to implement an automated deployment of mining rigs using one of the popular configuration management tools. To find an answer to such research questions and to get real world usage data, I conducted a Monero User Research survey in which 113 participants shared their habits regarding Monero cryptocurrency.
Based on the survey results and IT industry practices I proposed a Monero usage and storage best practices guide that covers the key generation, wallet management, and a secure backup scheme. Aside from clients, key parts of Monero are also miners and Monero network itself. As miners are the ones who verify transactions and keep the network running, it was important to describe the mining software and categories which are later used in the Monero Miners Research survey. In the survey, 60 miners shared technical information about their current mining setups. This was later reflected in the proposed guide for designing secure mining environment in which the automation was the main aspect.
The thesis describes a detailed overview of wallet and its types, as well as ways how to attack the wallet, followed by transaction features in the Monero and problems in Monero environment from both Monero network and Monero malware sides.
The thesis is divided into 10 Chapters. The first three Chapters describe Monero cryptocurrency, its development cycle, transactions in the network, wallets, multisig together with cryptocurrency competitors, problems in Monero environment and overall Monero use case. The fifth and sixth Chapters describe the Monero User Research, its results and propos a detailed guideline for best practices in Monero usage and storage. The eight and ninth Chapters describe the Monero Miners Research, its results and the design of the secure mining environment. The last Chapter covers the final conclusion.
2 Cryptocurrency
This Chapter is aimed as a starting point that explains terms and technology that will occur throughout the following pages and Chapters. Although these terms provide only a short description, it is recommended for every reader to swift through them as in later pages they are discussed and used in detail thoroughly.
Cryptocurrency is a digital currency that is designed to use cryptography to secure and verify its transactions. Cryptocurrencies are decentralized as opposed to traditional money transaction systems used in the banks. Decentralization is established by using distributed blockchain that functions as a transaction database within the currency. First cryptocurrency available was Bitcoin.
Altcoin is a term used for every cryptocurrency that is not Bitcoin.
The fork happens when developers create a copy of existing project codebase and start their path of development with it.
The market capitalization (market cap) is a total value of cryptocurrency that refers to the total number of emitted coins multiplied by the value of the coin.
The blockchain is a technology responsible for storing every transaction that has ever been processed in the cryptocurrency, also often called as a ledger. The main purpose of the blockchain is to ensure the validity of completed transactions.
Transactions within cryptocurrency are processed together as blocks that are verified by miners and then added to the blockchain as a new mined block.
The wallet is a storage medium that holds private and public keys by which the user can access, send and receive funds. Wallet effectively does not have the coins but is rather a key to access them from the blockchain.
The node is a computer connected to the cryptocurrency network. The node is often referred to as a full node which means that the computer maintains a full copy of blockchain. This results in node downloading every block and transaction and checking them against cryptocurrency rules, especially whether the transaction has correct signatures, data format and the right number of emitted coins per block.
The mining process is done by miners that verify transactions on the network and adds them to the blockchain together in the form of a block which results in new coins being emitted as a reward for block solving.
Mining in pools is the way how individual miners pool their computational resources. Due to resources pooling, there is a higher chance of solving the block, therefore gaining the reward of newly emitted coins.