Privacy coins are a pretty controversial topic in the cryptocurrency industry. They hide data about their users, and as a result, many powerful entities in the media and government are distrustful of them. However, purveyors of freedom laud these coins, both for their advancements in technology, and for their pursuit of financial freedom from a state or central body. But what are privacy coins in a decentralized industry and why are they important? Let’s take a look at the best privacy coins that you need to know about.
Monero (XMR)
The first on the list of privacy coins is Monero. Monero is likely the most well known example of a privacy coin. Launched in April 2014, Monero (XMR) means money is Esperanto. Monero was originally a fork of Bytecoin, which is a private and untraceable cryptocurrency. Monero privacy coin uses CryptoNote technology, Ring Signatures, Ring Confidential Transactions and Stealth addresses to maintain the privacy of its users. Monero privacy is well celebrated in the industry.
CryptoNote is a form of open-source protocol that allows for increased privacy in crypto asset transactions. While most crypto assets use unchanging signatures as a way to verify transactions, CryptoNote uses Ring Signatures. Ring Signatures bring together a group of signers to form a ring, verifying the transaction and keeping the actual signer anonymous. Stealth addresses hide the receiver of the transaction. There’s no doubt that Monero is one of the best privacy coins out there.
Dash (DASH)
Dash (DASH), formerly known as Darkcoin, was founded in January 2014 out of a fork of Bitcoin. The aim was to offer faster and more private transactions, compared to what Bitcoin was able to deliver. Dash uses a two-tier architecture which powers its blockchain. The first tier is comprised of miners who secure the ecosystem and write transactions to the network. The second is made up of masternodes, who work on instant and private transaction sending, and decentralized governance.
The main features of Dash are:
- Instant Send: Immediate transactions.
- Private Send: Coin mixing based on the CoinJoin implementation.
- Decentralized Governance by Blockchain (DGBB) – A mechanism that allows for the management of funding in the future, and self-governance of the Dash community.
Ryan Taylor, CEO of DCG, Dash's development team, says that they maintain backports with BTC but reject RBF, Segwit, and LN as they're not needed as Dash has committed to scaling on chain. #Dash is digital cash, not a wonky settlement layer. @RTaylor05 https://t.co/n8HrIGGE1B
— Chris Webb (@kanuuker) November 25, 2019
ZCash (ZEC)
ZCash (ZEC) is the first widespread implementation of Zerocash, the cryptocurrency protocol that preceded it. ZCash’s protocol is based on zK-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument). Funds in ZCash can be transparent (public) or shielded (private). The transparency is the same as in Bitcoin, with the same privacy features. Shielded values include a paying key, which is part of the payment address and destination where notes can be sent. This is then connected to a private key, that uses spend notes that are sent to the address – known as the spending key. Basically, a sender can use encrypted output notes to send funds on the blockchain. The receiver then uses the viewing key to scan the network for notes that are addressed to them, and can then decrypt those notes.
So, what are privacy coins in a decentralized industry, and which are the best privacy coins on the market? Unlike coins like Bitcoin, privacy coins are pretty discreet. You can trade Dash, and ZCash on trading sites like eToro, and on most major exchanges.
Privacy Coins: Are they the future?
This list of privacy coins is hardly exhaustive, but they’re all vital to the space. As we move into a future that’s increasingly authoritarian, will privacy coins become more popular? As our freedom is threatened, it’s possible that more people will look to privacy coins as a way to maintain their liberty. So, what are privacy coins in a decentralized industry? They just might be a lifeline someday.
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