Tron: Decentralize The

D I G I T A L - A S S E T R E S E A R C H & R I S K M A N A G E M E N T www.paribusgroup.io TRON: R E L E A S E D A T E : M A Y 2 0 1 9 version: 1.0 DECENTRALIZE THE WEB A Paribus Group Report MONERO: SECURE-PRIVATE- UNTRACEABLE DISCLAIMER Trading on any market carries a high level of risk, and may not be suitable for everyone. Past performance is not indicative of future results. Before getting involved in investing or trading, you should carefully consider your personal venture objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial deposit and therefore you should not risk funds that you cannot afford to lose. You should be aware of all the risks associated with trading any market, and seek advice from an independent financial advisor if you have any doubts. THE MEMBERS OF PARIBUS GROUP ARE NOT REGISTERED FINANCIAL ADVISORS OR LEGAL COUNCILORS. The information contained in this publication does not constitute legal or financial advice or a solicitation to buy or sell any asset contract or securities of any type and is to be regarded for educational or entertainment purposes only. Paribus Group will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Our analysis is based on publicly available information. We do our best to keep our analysis in line with recommendations in view of the legal context of each country’s regulatory system at the time of writing. Any statements made in our analyses is strictly our own opinion and readers of this publication should exercise their own judgment when electing to purchase or use any Digital Asset. CONTENTS Section I: Team Section II: Technology Section III: Application Section IV: Adoption & Alliance Section V: Legal Section VI: Economic Section VII: Marketing Section VIII: Sentiment Section IX: TTAALEMS Risk Assessment Section X: Tips SECTION I: TEAM Section Overview Monero’s approach to their project is unique in comparison to other projects in the space. Their vision of creating a monetary system that upholds the privacy and anonymity of the users is reflected by their modus operandi. Even their main team has largely opted to maintain anonymity. Highlighted Team Members: The Monero Team page on their website looks like this: (Source: https://web.getmonero.org/community/team/) Section Analysis Finding substantial information on the Monero team is tricky business. The core team is sticking to their guns when it comes to maintaining their personal privacy and anonymity. This makes it difficult to verify the legitimacy of individual members. The philosophy behind their team structure is to keep it decentralized. Even the over 500 strong volunteer developers and the Monero Research Lab are completely independent entities who develop, research and find applications for the underlying technology of Monero. Stoplight Matrix Positives Needs Improvement Red Flags -The team has done a great -The fact that there job overseeing the entire is very little to no project, regardless of the concrete decentralized nature of the information on the project. individual members of the core team somewhat undermines the assurance factor for investors. SECTION II: TECHNOLOGY Section Overview The Monero project is one of the first privacy coins to become well accepted by advocates of the Cryptospace. It is an open-source project which means that while development tends to take a bit longer, the code is completely auditable and the product is often contributed to by multiple parties all around the world. Monero’s technology is based upon The CryptoNote protocol, a protocol published anonymously on the TOR network in 2012. It implements the CryptoNight Proof of Work Protocol and additional upgrades through Ring Confidential Transactions (RingCT) and stealth addresses. The main way in which Monero protects privacy is through obfuscation rather than encryption, which can potentially be problematic. Facts and Figures ● Monero relies on multiple layers of obfuscation to achieve privacy. Ring Signatures, Ring Confidential Transactions, and Stealth Addresses. Ring Signatures use multiple addresses to sign the Public Blockchain so that a user cannot determine which address actually sent the transaction. In this sense, the user’s address is not encrypted but rather hidden amongst decoy addresses. Ring CT protocol applies a similar approach to masking transaction amounts in multiple rings. However, the confirmation of the transaction is done with mathematical proofs based on the input of the transaction. On the Monero network, the input of transaction MUST match the output. Therefore if an individual holds 250 Monero, whenever they transact they are technically using all 250 Monero. For example, someone paying for online services that cost 15 Monero would place a transaction with two outputs, one for 15 Monero and one for 235 Monero. The 235 is returned to the user's address (Or another address they own), and the 15 is sent to the payment address. This way, all 250 Monero is accounted for, giving the network enough information to confirm the transaction while simultaneously preventing fraudulent transactions. A user’s public key (or address) is modified using an algorithm to create a one-time address for the transaction, which is known as a stealth address. The (Simplified) process of a Monero Transaction is as follows. 1 . User begins a transaction by creating transaction outputs, (Who the transaction is to and what the amount to be transacted is.) and using their private spend key to confirm they want to send the transaction amount. Along with the genuine transactions, decoy transaction outputs are created to help the protocol obfuscate the transaction. 2. The protocol then takes the transaction outputs, both real and decoy, to create a Ring Signature which contains genuine transaction output, the key image, and the decoy transaction outputs within it. (This is called a Borromean Ring Signature) 3. Something called a Commitment Scheme is used to create a value of all the transaction hashes, which is used to prove that the transaction is not fraudulent via homeomorphic addition. (Transaction Input/Output values must balance each other out after transaction fees are taken into account). 4. A Stealth Address is generated from the Receiver's public address. 5. Transaction is sent to the Monero Blockchain. 6. The Receiver's address looks for transaction’s across the network that it can view using it’s Private View Key. Once the correct transaction is spotted through identifying the transaction output with the proper Key Image, the Monero Blockchain will confirm the transaction using the CryptoNight Proof of Work Algorithm. (https://ww.getmonero.org/library/Zero-to-Monero-1-0-0.pdf) ● Researchers from several Ivy League Schools explored the possibility of tracking Monero transactions through several differing methods. These methods rely on timing attacks, deduction, and previous versions of Monero that allow attackers to identify previous legitimate addresses and coin payments when privacy settings were optional when transacting across the chain. (https://arxiv.org/pdf/1704.04299/) ● Lack of Geolocation and IP masking makes fingerprinting attacks, an attack in which the user’s seemingly non-sensitive data is used to create a unique profile which can then be tracked across the web, a viable option for hackers or law enforcement. This issue is proposed to be solved by implementing a version of the I2P Network within the Monero Blockchain. However, this has yet to be implemented. ● The Monero blockchain uses ASIC resistant mining algorithms which prevent ASIC miners such as the Antminer 3X from being effective. However, this has served to increase the prevalence of malware which creates botnets to mine Monero. A botnet is a network of computers linked together to accomplish a singular task or series of tasks. The privacy of Monero and its design for individual machines has also increased its use across the dark web and is the currency of choice for cyber-criminals. Section Analysis Monero is one of the best privacy tools out there when it comes to protecting transactions for everyday people. However, it’s reliance on obfuscation rather than encryption is a weakness that could potentially be utilized to fingerprint specific transactions. Likewise, geo-locations and IP address tracking, two common tactics of both law enforcement and the hacking community could be a potential privacy issue which could unmask certain users. Until Monero fully implements Kovri or another similar masking system for user’s geo-location data and IP addresses, additional privacy systems will need to be used in conjunction with Monero to remain completely anonymous. That said, Monero is still one of the best privacy cryptocurrencies with some of the most robust development communities. Stoplight Matrix Positives Needs Improvement Red Flags - Previous - Good blend of privacy tools - Device geo-location and version’s integrated. IP addresses can transactions potentially be used to prior to - Future upgrade plans to currently identify users. make privacy even better. enforced - Monero’s PoW privacy - Most robust obfuscation- measures are algorithm combined with based privacy solutions in viewable on the it’s privacy features Gen 2 cryptocurrency. Monero make it the prime Blockchain, - Chronic code audits currency of crypto- weakening mining malware and current other cyber criminals. obfuscation. SECTION III: APPLICATION Section Overview The application of privacy needs very little introduction for most people. However, privacy is under attack more than ever before; it is no wonder there are so many privacy coins and platforms being developed. The use-case for private finance is remarkably under-developed in general society, given how critical finance is to every other area of privacy and free- speech.

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