How Monero privacy actually works, in plain words

On Bitcoin, anyone can follow coins from address to address and read every amount. Monero was built so that the chain says almost nothing to an outsider. It does that with three ideas working together.

Stealth addresses hide the receiver

When someone pays your Monero address, the coins do not land at that address on the chain. The sender creates a one time address for that single payment. Only your wallet can recognise that it belongs to you. Two payments to the same published address look completely unrelated on chain.

Ring signatures hide the sender

When you spend, your wallet mixes your real output with fifteen others pulled from the chain, giving a ring of sixteen. The signature proves one of them is being spent without revealing which one. An outsider sees sixteen possible sources, not one.

RingCT hides the amount

Amounts are encrypted. The network can still verify that nothing was created out of thin air, because the math checks that inputs equal outputs, but nobody watching learns how much moved.

What Monero cannot hide

• Your IP address, unless your wallet connects through Tor or i2p, or you run your own node.
• Your exchange account, if you bought XMR somewhere that knows your name.
• Your habits, such as always moving the same amount at the same hour.

That last part is where swaps fit in. Swapping into Monero from a wallet you control, into a fresh subaddress, avoids putting your Monero history into any exchange database. See BTC to XMR or the Monero page.

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