Monero [XMR], the most popular privacy-focused cryptocurrency and the 13th most valuable network according to Coinmarketcap has successfully undergone a network upgrade today 10th March. Activating on block #1788000, the code upgrade is designed to introduce several network improvements but four of them are worth mentioning as they are the most impactful.
The most pressing issue that the hard fork introduces to the network is an anti-ASIC algorithm to the current Proof of Work algorithm. There have been reports that the network is being overrun by ASIC miners which introduces the risk of centralization and thus making the network more prone to the 51% attack.
This hard fork implements the CryptoNight-R algorithm that will disable all ASIC mining software code and prevent any future mining through ASIC chips. This, therefore, means that all miners will have to update their mining software and others completely replacing it. In addition, those using ASICs will have to acquire new mining equipment.
The second feature the hard fork introduces is an improvement to the dynamic block size algorithm which in its previous iteration was vulnerable to the big bang and spam bloating attacks. Monero block size algorithm was designed to accept blocks with sizes not larger than the median of their preceding 100 blocks. Which means that the network was designed to be dynamic therefore absorbing easily transaction spikes during periods of stress.
However, this feature allows any nefarious network user to accumulate enough computing resources “that would exceed the capacities of the extant Monero infrastructure on the scale of hours.” This explanation has been given by Dr. Mitchell Krawiec-Thayer, founder of Noncesense Research Lab.
Third, on the list is an introduction of “dummy encrypted payment IDs” that will introduce the element of homogeneity or sameness of transactions therefore further obfuscating the transactions and increasing privacy. With this element in place, it will be harder for blockchain analytics software to identify the source or destination of funds on the blockchain.
Finally, the other significant improvement coming to the Monero network is the shrinking of the size of amount encodings and using deterministic masks to simply the number of commits.
Two Monero clients were released earlier this past week with the community encouraged to upgrade as soon as possible to ensure a smooth hard fork.