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XMR Blockchain Wallet Fraud – Monero Warns of Fake Wallets

In April 2017, the price of Monero, the arguably most privacy orientated altcoin that there is, topped just $22.78. At the time of publishing, however, Monero has added almost $100 to its price per coin and is currently trading at $121.54. What is more, the Monero price seems to be still climbing. There is only one problem. On November 14th, the XMR community had to issue an urgent warning to Monero holders and new investors, not to use the Monero blockchain wallet XMR-WALLET.ORG.

Why XMR & Other Blockchain Wallet Scams are on the Increase

While XMR-WALLET.ORG might sound like the official Monero wallet, the Russia based domain has absolutely no connection to anyone in the XMR development community. What is more, no one really knows who created or controls the wallet. All that is known is that complaints regarding lost and irrecoverable XMR-WALLET.ORG balances are on the increase.

Running an official blockchain wallet on a PC simply isn’t practical for many people. The more a digital currency like XMR grows, the larger the blockchain. This then leads to increased blockchain download sizes and storage costs. Much more importantly, people like to transact Monero and other digital currency formats on the go, not solely via their PC. This is why web blockchain wallet applications and mobile apps have become so hugely popular.

Sadly, scammers have realized that they only need access to private keys linked to XMR (and other digital currency) balances, in order to swipe balances for themselves. This being the case, fake web based blockchain wallet applications like XMR-WALLET.ORG are becoming much more common.

How to Always Choose a Safe Monero Wallet

By and large, people only fall victim to fake blockchain wallet offerings when relatively new to the cryptocurrency marketplace. The good news, however, is that chances of falling victim to blockchain wallet fraud can be completely mitigated. All Monero and other digital currency buyers need to do, is only ever use wallets which are directly endorsed by developers of a blockchain. Either this or use wallets which offer multicurrency support and are endorsed by other big digital currency players like Bitcoin and Ethereum.

Has XMR-WALLET.ORG Damaged Monero?

Thankfully for investors and XMR itself, the XMR-WALLET.ORG fraud hasn’t in any way detered people from buying Monero. In fact, by publically acknowledging blockchain wallet fraud, XMR has arguably made itself more favorable as a short and long-term investment vehicle to Ethereum. Ethereum, after all, is still grappling with it’s own in-house security problem. This and being suspiciously quiet in regard to whether or not millions of Ethereum tokens locked in blockchain by a rogue developer might actually be recoverable.

Monero (XMR) is a decentralised open-source cryptocurrency forked from Bytecoin in April 2014. The coin’s fundamental feature is privacy – it aims to be a digital medium of exchange with untraceable payments, unlinkable transactions and resistance to blockchain analysis. This is achieved thanks to a proof-of-work algorithm called CryptoNight, developed by the CryptoNote project. CryptoNote uses so-called “ring signatures”, a sophisticated scheme that demands several different public keys from a group of users for verification. As such, the exact person behind a Monero transaction is not known; this results in considerable increase of privacy compared to Bitcoin and its forks.

Like Bitcoin it is not known exactly who created Monero; it was first outlined in an October 2013 whitepaper by the pseudonymous figure Nicolas van Saberhagen and called Cryptonote. The idea was later coded into a currency called Bitmonero by another pseudonymous individual known only as “thankful_for_today.” Open-source coders on the Bitcointalk forum disagreed with thankful_for_today’s direction for the currency and forked it in 2014 to create Monero.