Cryptonote's creators spotted some (ideological?) issues in Bitcoin's (Blockchain's poster child currency) approach, and set out to solve them. The key issues seemed to be:
Bitcoin is fundamentally a pseudo-anonymous electronic cash system. Workarounds have been made but they remain just that: workarounds. For example: the IRS analyzing transactions to find tax cheats.
Bitcoin's implementation of proof of work, which includes a risk of failure on the "one CPU one vote" principle as well as on propagation over system updates.
Bitcoin's irregular emission of the hashrate as a consequence of halving the mining reward every 4 years. This could create dips that risk to be opportunities for bad actors.
Inefficiency in system change because of hardcoded constants (e.g., block size), which combined with #2 create unpredictable situation that risk the success of the network. For example: the much debated Bitcoin (Core) and Bitcoin Cash debacle.
CryptoNote provides anonymous transactions via unlinkable public keys and ring signatures. In other words: 3rd parties can't figure out sender, receiver or even the amount on the transaction.
CryptoNote lowers the barrier to serve as a miner in the network because of the more egalitarian proof of work via algorithm's efficiency on regular CPUs (versus GPU or specialized ASIC hardware). In other words: your desktop / laptop / server or even mobile phone can add relative significance to the network.
CryptoNote has a smooth emission of new coins.
CryptoNote is resilient as it adapts its network dynamically (as opposed to developer made code changes) via its dynamic parameters. In other words: you are not dependent on the whims of a handful of developers as the network monitors its behavior and adapts accordingly.
CryptoNote philosophy is built on privacy as a fundamental human right, and egalitarianism. According to the whitepaper, the CryptoNight algorithm is intended to make the coin adhere to Satoshi Nakamoto's original vision of “one-CPU-one-vote” system. Thus the tremendous advantage GPUs have over CPUs in most cryptocurrencies is considerably decreased in CryptoNight. Whether if this is a good thing or not is debatable.
- CryptoNote main website: https://cryptonote.org/ (and stay up to date via their Twitter feed)
- Original white paper: https://cryptonote.org/whitepaper.pdf (Oct 2013).
- Wikipedia's article also has solid information: https://en.wikipedia.org/wiki/CryptoNote (Jan 2017).
- Take the Red(dit) pill and follow all the CryptoNote latest underground discussions.
- (draft): nice wallet on another CryptoNote coin https://github.com/RocksteadyTC/ooze/blob/master/README.md
- (draft): "faucet" to "airdrop" coins https://faucet.trtl.me/