Ring signatures
Every Coin payment is signed by a group of 16 possible senders. Anyone can check that one of them signed. Nobody can tell which one.
Automatic. Your wallet does this on every payment. There is nothing to turn on.
Your real input is one of 16 outputs taken from the blockchain. The other 15 are decoys. The signature proves that one of them is yours, and nothing more.
The problem it solves
On a transparent blockchain, spending a coin points straight at the payment that created it, so anyone can follow money from wallet to wallet. Ring signatures break that link at every step.
How a ring is built
When you send coins, your wallet picks 15 other outputs from the blockchain to act as decoys and mixes in the one you are really spending. It then signs with a ring signature, which proves that the signer owns one of the 16 without saying which.
Decoys are chosen to look like real spending, so the real input doesn't stand out by its age.
Why nobody can spend twice
Each signature also carries a key image, a tag made from the real output that can't be traced back to it. Spending the same output again would produce the same key image, so the network rejects the second attempt.
The same for every payment
Every Coin transaction uses rings of exactly 16. Nobody can choose a different size, so no payment can be singled out by the way it was signed.
- The 16 possible outputsVisible
- Which one was spentHidden
- Key imageVisible, blocks double spends
- Your addressHidden
One part of the whole
Ring signatures hide who sent a payment. Stealth addresses hide who received it and RingCT hides how much moved. Together they cover the whole payment.