A cryptographic digital signature that obfuscates the identities of two parties within a transaction.
Let’s imagine that Tracy wants to send 50 XMR to Nicky. She would be given a one-time spend key. To ensure that her identity can withheld, a number of people involved in past transactions would be selected at random in order to serve as decoys. This means that, to a casual observer, it would be possible that any single one of them could be involved.
In future, Tracy’s public key may end up being used to serve as a decoy in other ring signatures.
Indeed, the US has made a concerted effort to crack Monero’s systems in order to ensure that the true participant in a ring signature can be identified. The IRS has spent hundreds of thousands of dollars in an attempt to find a workaround.
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