Cryptocurrencies are usually pseudonyms, but not necessarily private. Bitcoin (BTC) and other assets operate on blockchains and every transaction is hosted on the internet. During a transaction between two or more parties, assets are transferred into different portfolios, each of which is a series of letters.
Since these addresses and transactions are available to everyone, there is a certain level of traceability, especially if the wallet transfers money to a switch that requires KYC verification.
Some cryptocurrencies, often referred to as confidential coins, private coins, or anonymous coins, try to hide information about transactions, giving users more privacy. Why would anyone want privacy if they haven’t done anything illegal? It can be a preference or perception of privacy as a fundamental human right for two reasons. The criticism is mostly private. Not every transaction is recorded in one place for everyone to see at the click of a button.
There are a number of possible ways to add privacy to bitcoin, including peer-to-peer trading, although many cryptocurrencies focus on privacy directly through their technology. Some of the well-known crypto room privacy tools include Monero (XMR), Zcash (ZEC), Verge (XVG), Beam, and Grin. Dash does this on the list as well, as it provides great anonymity even if the coin is not technically classified as a privacy device.
One of the best known real estate assets in the industry, Monero hit the scene about seven years ago after generating several headlines in recent years. Monero prides itself on decentralization and creates assets that support these declared values. “This was a fair, previously announced release of the CryptoNote reference code,” Monero’s website says. “There was no burden, no instamin, and no part of the block reward went into development.”
Monero, a blockchain-based proof of work coin, has many different privacy technology features for each site, including hidden addresses and RingCTs. XMR in 2017 added the message “RingCT, short for Ring Confidential Transactions, is like hiding transaction amounts in Monero,” explains Moneropedia, the explanatory portion of the asset website.
Monero sparked interest from the US government in the second half of 2020. The IRS recorded profits in excess of the asset and pledged up to $ 625,000 in exchange for violating currency privacy technology. Two blockchain analyst groups, Integra FEC and Chainalysis, received the award a few weeks after the IRS announced the award.
Zcash has been hailed as another popular privacy-focused asset in the crypto space. It was launched in 2016 by Electric Coin, led by cypherpunk Zuko Wilcox. According to the parent site, Zcash comes from the same Bitcoin token. ZEC is working on its own blockchain with PoW consensus, separate from Bitcoin.
ZEC allows private transfers, which are called secure transactions and public transactions. Zcash’s website states, “Zcash gives you the ability to conduct sensitive transactions and financial privacy through secure addresses,” adding, “Zero proof allows you to verify a transaction without disclosing the sender, recipient, or transaction amount. Zcash’s selective discovery features allow the user to share any details. A transaction to be executed or reviewed. ”
Dash (sort of)
Dash is another popular cryptocurrency privacy feature. However, the currency development arm of the Dash Core Group has confirmed on several occasions that Dash is not a privacy tool, although it does have additional features for added anonymity.
“Dash is a payment cryptocurrency that focuses on ease of use, which includes speed, price, usability and user protection through added privacy,” Marketing Director Fernando Gutierrez told Cointelegraph earlier.
“Dash is not AEC!” DashPay CEO Ryan Taylor said in his January 2021 tweet, referring to Anonymous Extended Cryptocurrency, or AEC, a term used by US regulators. “As a literal fork of Bitcoin, all Dash transactions are completely transparent,” he added in his tweet: “All inputs, outputs, addresses and amounts are recorded in every transaction and can be viewed by anyone on the public blockchain.”
XCoin joined the cryptocurrency world as a fork of Bitcoin 2014, which was later renamed Darkcoin and then Dash. The asset is based on proof of stake blockchain.