In the crypto space, where most of our transactions are transparent and could be viewed by anyone around the globe, a set of cryptocurrencies prevents user’s identities from being discovered on the blockchain. These cryptocurrencies are known as privacy coins, and we will be looking at the different coins, the technology they use and their functions.
Blockchains are digital ledgers that store transaction information that anyone can view. Almost all blockchains work on this basis and provide transparent, immutable access to the history of any address. This means that to the trained eye, there is a slight chance that they can figure out the identity behind the wallet address. Furthermore, on-chain analytics software has evolved over the past few years to monitor the movement of funds and figure out just that. Privacy coins have been introduced in the crypto space to help maintain individuals anonymity.
What are privacy coins?
Privacy coins are cryptocurrencies that hide transactions in the blockchain through in-built privacy functions. Among other things, these cryptocurrencies allow users to send or receive funds anonymously. Techniques used by these cryptocurrencies include hiding wallet addressees and interchanging funds to overcome on-chain analytics.
At the end of the day, these coins serve a very specific purpose: to protect an individual’s privacy and provide anonymity. These coins use advanced technologies like the zero-knowledge shard’s, Coinjoin and stealth addresses.
Examples of Privacy Coins
Dash was the first-ever privacy coin to enter the crypto market. The coin was forked off of bitcoin back in 2014 and uses the Privatesend — a Coinjoin technology to maintain its user’s anonymity. Coinjoin combines multiple transactions into one transaction and later separates the funds later on using a new address. Users of the cryptocurrency can choose to opt for this privacy function for their transactions or choose traditional transaction types.
Dash has a market cap of $1.37 Billion, is currently ranked 92 among all other cryptocurrencies and is up 24.9% since the beginning of the year. Click here to trade Dash on BitYard.
Zcash is a digital currency that is fast, convenient and provides privacy options at a low fee. Zcash shields its transactions and uses the zk-SNARKS, a form of zero-knowledge cryptography that gives users the most privacy. Like bitcoin, the Zcash transactions are posted in the public blockchain — but unlike bitcoin, Zcash gives its users the option of confidential transactions.
Zcash has a market cap of $1.82 Billion, is currently ranked 80 among all cryptocurrencies and is up 110% since the beginning of the year. Click here to trade Zcash on BitYard.
Monero is a cryptocurrency that focuses on private and censorship-resistant transactions. Unlike the other privacy coins discussed, all users of Monero are anonymous and do not have the selectivity in the privacy option. Stealth addresses, ring signatures and ring CT are used to hide the sender, receiver and the amount sent in Monero.
Monero has a market cap of $3.36 Billion, is currently ranked 51 among all cryptocurrencies and is up 17.6% since the beginning of the year. Click here to trade Monero on BitYard.
As usual, none of this information is financial advice, and you should do your own research before participating in any of these projects mentioned in this project.