The main privacy coin Monero (XMR) will undergo a non-backwards compatible upgrade of the protocol in mid-July. This brings some small but significant improvements to the existing technology.
The Monero community agreed on a hard fork on July 16th . More precisely: The upgrade is activated with block 2,668,888.
What changes does the upgrade called V15 bring?
In short: V15 should improve the anonymity of the signatures. To do this, it increases the size of the rings in which the signatures are embedded from 11 to 16. It also makes transactions “lighter” by updating the bulletproof mechanism to a new version called “bulletproof+”. The introduction of “View Tags” is intended to massively accelerate the scanning of wallets, and a new fee structure should create more resistance to overload attacks.
Now in more detail and with a bit of background information for those who want to know more about it:
Monero uses so-called ring signatures . Ring signatures are a relatively recent cryptographic achievement. They have been known since 2001 and Monero is likely to be their biggest application. A ring signature is a digital signature that can be generated by any member of a specific group, without revealing who exactly actually signed from the “ring” of possible signers. Ring signatures are a core element of Monero’s privacy as they disguise who sent a transaction. It could be one, but also the other. V15 increasing the size of the ring from 11 to 16 potential broadcasters is the “absolute largest increase in the set of base anonymity.”
Bulletproof , on the other hand, is a technology to support confidential transactions. Confidential transactions allow the amount sent in a transaction to be disguised, while a zero-knowledge proof still allows the other nodes in the network to verify that the transaction is correct. In combination with ring signatures, Monero creates almost perfect anonymity. However, the proof required for this examination of the transaction was initially very large. Bulletproofs were able to massively shrink it, allowing Confidential Transactions to scale for the first time. Bulletproofs+ takes it one step further. According to the developer, it makes transactions “smaller, faster to generate, and faster to verify” by about 5-7 percent each.
Finally, the view tags are one-byte information in transactions. These should reduce the time it takes a wallet to scan the blockchain by 30-40 percent. With this, the developers are responding to a not insignificant problem. Because of the high level of privacy of Monero, it is much more cumbersome to find out the balance of an address than with Bitcoin and other cryptocurrencies (more precisely: With Bitcoin you can use the UTXO set to find out the balance of an address, while with Monero a wallet can find out each individual transaction must verify that it was signed with the private key stored in the wallet).
A hard fork is a non-backward compatible upgrade. With a hard fork, existing rules of a crypto protocol can be overridden and radically new rules can be introduced. Therefore, a hard fork allows developers to push through massive changes. However, it is always associated with the risk that many nodes will forget to upgrade, which can lead to a loss of network nodes and, in the worst case, trigger a split in the blockchain. A hard fork is a powerful tool, but requires community consensus.
This seems to be the case with Monero. With the V15 hard fork, the developers are once again substantiating their claim to develop the most technically mature privacy coin on the market and to further advance the technology of anonymous transactions. The July hard fork will be the 15th hard fork that the Monero protocol undergoes. The last one was a relatively long time ago, it took place on October 17, 2020.
It is noticeable that V15 does not introduce any fundamental innovations. Previous hard forks have introduced entirely new technologies such as Confidential Transactions, Bulletproofs or the Asic and GPU-resistant RandomX mining algorithm . V15 comes up with less drastic changes – but makes some details much better. This could be a sign of the technical maturity that Monero has now reached.