CryptoNote is an application layer protocol, developed by the little known Nicolas van Saberhagen,that aims to solve specific problems identified in Bitcoin, namely:
– Traceability of transactions
– The proof-of-work function
– Irregular emission
– Hardcoded constants
– Bulky scripts
The Cryptonote protocol powers several decentralized privacy-oriented cryptocurrencies such as Bytecoin, Boolberry, Dashcoin, DigitalNote, Monero, AEON, etc (more implementations found here).