The top 5 privacy cryptocurrencies you have to know
Bitcoin is not nearly as private as many think. But there are a ton of other cryptocurrencies that have their main focus on privacy. Today we take a look at the five most promising privacy coins.
Cryptocurrencies are usually pseudonymous, but not private. For example, cryptocurrencies such as Bitcoin (BTC) and Ethereum run on blockchains, where every transaction can be viewed publicly online. Every transaction between two or more parties can thus be traced. In addition, each crypto wallet has a unique address that can be viewed publicly.
You don't always know who exactly is behind such wallet addresses, but there is still a certain degree of traceability. Especially when a wallet is transferring funds to a crypto exchange.
Privacy coins, on the other hand, try to hide information about transactions in order to give users more financial privacy.
5. Verge (XVG): $ 400 million market capitalization
Verge combines two different functions to obfuscate transactions. The Privacy Coin uses the Tor network so that the IP addresses of users are hidden by default. In addition, so-called stealth addresses are used to disguise transactions even better. Stealth addresses are based on the same principles as hierarchical deterministic wallets.
In simple terms, this means that an unlimited number of unique addresses are generated for which there is only one password. This makes it very difficult to assign which transaction is related to which wallet.
However, if you send XVG to two different addresses, it is still possible to tell where the transaction came from. Verge has already had data leaks in the past and the crypto project was the victim of a 51 percent attack just a few days ago.
Nevertheless, the Privacy Coin XVG was able to perform strongly in the last 30 days and has increased by almost 100 percent.
4. Horizen (ZEN): $ 850 million market capitalization
Horizen is a privacy focused blockchain. The project uses ZK snark technology, which is also used for other privacy coins. The so-called ZK Snark technology encrypts transactions and is intended to allow users complete anonymity.
Horizen distinguishes between two types of addresses, namely private Z-addresses and public T-addresses. Depending on whether users want to carry out private or public transactions, they have the option of choosing between the two address types.
ZEN's blockchain platform aims to be a universal platform that focuses entirely on privacy. In addition to private transactions, ZEN also offers a private messaging service (ZenChat), a domain similar to the TOR network (ZenHide) and several sidechains. The ZEN token is always at the center of the Horizen ecosystem.
3. Zcash (ZEC): $ 1.7 billion market capitalization
Zcash is one of the most famous privacy coins in the crypto space. The project was founded in 2016 by the Electric Coin Company, led by Cypherpunk Zooko Wilcox. In addition, ZEC is a fork of Bitcoin that operates its own blockchain based on proof-of-work.
ZEC allows private transfers (shielded transactions) as well as public transactions. Just like ZEN and some other privacy coins, ZEC uses zero-knowledge proofs to conduct transactions without revealing the sender, recipient or transaction amount.
2. Dash (DASH): $ 2.8 billion market capitalization
Dash was an early fork of Bitcoin, initially called “Xcoin”. The project later became Darkcoin and eventually took the name Dash, for “Digital Cash”. At DASH, users can activate a privacy function to send transactions anonymously. A coin-mixing protocol anonymizes transactions, but the transaction fees also increase.
Even so, Dash's private send functionality is still not as secure and anonymous as Monero or Zcash. Dash's mixing method obscures transactions, but the sender and recipient are not completely anonymized.
Still, Dash is currently one of the largest cryptocurrencies making private transactions possible.
1. Monero (XMR): $ 4.6 billion market capitalization
Monero is the most popular privacy cryptocurrency in the world. XMR is probably the most anonymous cryptocurrency in the entire sector. By using so-called ring signatures and stealth addresses in transactions, Monero makes transactions extremely difficult to trace.
The two methods help to completely hide the identities of the sender and recipient. In addition, the transaction amount is completely hidden so that even more privacy is guaranteed. However, the privacy coin is always in the focus of regulatory authorities and organizations such as the FBI or Europol have long since taken up the fight against privacy coins such as Monero.