What is CryptoNote?

CryptoNote is open-source protocol, which provides complete anonymity of users in the network. So, users can send transaction between each other without any public record in the network.

Bitcoin anonymity is a major problem from the beginning of the network because all transactions can be tracked through the network. Everyone can look at bitcoin explorer and see directions of transactions.

This can be real problem, if you have the account at some crypto-fiat exchange with your ID profile and you have linked some deposit/withdraw crypto accounts based on the public ledger. Thanks to the public ledger records, all transactions can be possibly tracked directly to your identity.

Unlike Bitcoin, which have all transactions in public ledger, CryptoNote Solved this problem. So, CryptoNote based currencies allow users to use the network completely anonymously. Most Famous currency is Monero, which is highly using in dark markets.

CryptoNote protocol

How CryptoNote works?

The classic digital signature concept allows, that your transaction is traceable directly to your public address. If your address is connected to some exchange with your identity, your movements are completely traceable.

Simply said, the digital signature algorithm needs your approve provided by your private key, which generates one secret key to sign your transaction, after that the signer algorithm will generate the public key of this transaction, which is directly traceable to your public wallet address.

ordinary digital signature

CryptoNote solved this problem through Ring signatures, which will provide complete anonymity of each transaction in the network. Ring signature provide, that no one knows who exactly was send the transaction. In the classic digital signature, you need one secret key to sign your transaction.

In Ring signatures algorithm, there are a group of individuals each with their own secret key and the public key which are interest in sign transaction. As a result of this solution, no one exactly knows to whom it belongs their address.

Ring signature Cryptonote

Also, you can look for more information about this technology on Wikipedia or CryptoNote webpage.