If there are privacy coins, does it mean Bitcoin and other cryptocurrencies are not private?
Privacy coins are a special kind of cryptocurrency that you can use to maximize your data privacy when engaging in blockchain transactions. You are guaranteed total anonymity including activities surrounding your transactions. Buyers and sellers are protected by privacy coins to stay anonymous and private with your wallet addresses, transaction balances, and payments.
The Way with Bitcoin
Bitcoin is actually not that anonymous in the sense that it is an open-sourced public ledger that puts to record every single Bitcoin transaction. Each user is represented by a quasi-pseudonymous character sequence, called a public address, to conceal the user’s true identity. Bitcoin’s Blockchain protocol espouses peer-to-peer network of nodes connected to each other. The KYC verification alone can trace transactions back to the user. The distributed ledger technology (DLT) opens any transaction to everyone due to the public addresses. The hash makes it possible to connect transacting nodes and render the verified transaction immutable.
The Way with Criminality
Privacy coins are meant for users who highly value the privacy of their digital assets, and, for the most part, all users for that matter. Since Bitcoins inherent properties such as DLT and record immutability will not allow much for any criminal to hide their heist, they turn to privacy coins to cover their tracks. There is seen an actual increase of privacy coin use within the dark markets and its popularity is gaining traction and usability despite being low on liquidity.
The Way with Regulation
Law and justice are not sleepers on the many different ways criminals keep running scot-free and outwitting their long arms. Dark activities involving tax evaders, market manipulators, money launderers, drug dealers, gun runners, financiers of terrorism, etc. can be quelled with well-thought-of regulations coming into place in the crypto world. Anti-money laundering initiatives, know-your-client procedures, and combatting the financing of terrorism policies are a two way-process which include the protection of the crypto system so that legit users can utilize its premium mechanisms to advance wealth and economies, both personal and universal.
The Way with Privacy Coin Projects
Among the more than 60 different privacy-oriented crypto projects active in the market today, 4 projects stand out each with progressive privacy features to guarantee use privacy and anonymity.
Monero. Its headlining popularity attracts dark users to acquire Monero tokens. Proven features include unlinkable and untraceable transactions by the use of ring signatures and stealth addresses, thereby concealing the identities of both the sender and the receiver. Its Ring Confidential Transactions enable transfer of payments amount between transactors to remain hidden. As being the most trusted privacy coin in the world makes Monero also the 18th most valuable token with a market capitalization of $1.5 billion.
Dash. Dash is the coined word for digital and cash, forking form the original Bitcoin code. It distinguishes itself as being cryptocurrency’s first-ever privacy coin. PrivateSend is its main strategic feature that conceals transactions by cumulating them together and represented as one single transaction on the blockchain. The popularity of its anonymization value Dash to be a $741 million project, ranking 28th in market cap.
Zcash. This privacy coin employs non-interaction as its key strategy by using the Zero-Knowledge Proof concept called zk-SNARKS, that allows transactions between users without address revelation, and that includes the transaction amount. Zcash even granted power to users the ability to deny or reveal their own addresses accordingly, a control feature nobody else offers. With a market cap of $608 million, Zcash is ranked #30 in the crypto list.
Verge. This privacy coin protects the privacy of users differently by using The Onion Router (TOR) technology and the Invisible Internet Project (I2P), which renders it fit for daily use. Its open-source volunteer-driven protocol allows for fast, efficient, and decentralized transactions directly without losing privacy. TOR facilitates communications via a volunteer-run public network, while the I2P protects the data by encrypting it first before being sent through the global distributed network. All user addresses are hidden and renders all transactions completely untraceable. Verge currently ranks #119th in crypto market capitalization worth $81.2 million.
Privacy has become a very scarce commodity given the power of the Web’s countless social media portals that can literally expose and steal anyone’s information and identity at any given time. A conglomeration of commercial and economic giants exploits personal data to the hilt to the point of tilting wealth inflow to their favor only just by using bigdata gathering of individual’s thoughts, habits, actions, and ideas.
The importance of privacy coins cannot be emphasized enough given the present scenario. That is why the crypto space was born, and out of it came the cryptocurrency advocacy led by Bitcoin to finally give control back to us our stolen identities, and our stolen privacy.
This is an idea whose time has come.