How Monero keeps payments private
Stealth addresses hide who received, ring signatures hide which output was spent, and amounts are hidden. Here is what each part does.
4 min read
Private by default
On Bitcoin anyone can read the sender, the receiver and the amount of every payment. Monero hides all three by default, so you do not have to switch anything on.
Stealth addresses: who received
When someone pays you, their wallet creates a new one-time address for that payment. You can publish one address, yet every incoming payment lands on a different address on the blockchain that cannot be linked back to your published address. Only the sender and the receiver can tell where a payment went.
Ring signatures: who sent
When you spend, your wallet signs together with other outputs picked from the blockchain (decoys). Every ring member looks equally valid, so an outside observer cannot tell which one is really yours. Since the network upgrade of 13 August 2022 (Monero 0.18) the ring size is 16: your output plus 15 decoys.
Hidden amounts
Amounts are hidden with Pedersen commitments. The network can still check that no coins were created out of nothing, without seeing the amounts themselves.
What Monero does not hide
Monero protects what is written on the blockchain. It does not hide your IP address from the node your wallet connects to, and it cannot protect information you give away yourself, such as an exchange account with your name or a shared view key. The other guides cover those.
Sources
Next: Remote nodes and your privacy
Educational content, not legal or financial advice. Users are responsible for complying with their local laws. Internally reviewed by RugWard.