Ring signature

A ring signature is a cryptographic primitive that lets a signer produce a valid signature on behalf of a group (the "ring") of possible signers, in a way that verifies the signature came from one of the group members without revealing which one. It was originally described in the early 2000s and became famous as the sender-privacy building block of Monero.

In Monero, when you spend an output, the transaction includes decoy outputs pulled from the blockchain along with your real output. The ring signature proves that exactly one of the ring members is being spent — but not which. Observers see a set of possible spenders; the actual spender is cryptographically indistinguishable from the decoys. Combined with stealth addresses (hiding the receiver) and RingCT (hiding amounts), this gives Monero its default-private on-chain properties.

Ring signatures are probabilistic privacy — the size of the ring determines the anonymity set. Monero currently uses a fixed ring size for all transactions, so each spend is one of 16 possible outputs. Future upgrades (FCMP++) are set to increase the anonymity set to essentially all outputs on the chain, dramatically strengthening the guarantee.