It is no longer news that privacy coins are becoming more pervasive in the crypto space. While anonymity is one of the most commendable features of cryptocurrencies, in the sense that both the sender and receiver identities are unknown, have it in mind that it’s one of the driving factors behind the growing adoption of cryptocurrencies in the world today.
However, there have been several hacks on cryptocurrencies, and Bitcoin is no exception to this hit. Worryingly, some wealthy crypto investors and owners have been asking — could it have been possible because their transactions are still being publicly broadcasted and viewed by everyone on the public ledger?
As at November 2017, nearly 4 million Bitcoins was lost forever. Just recently, Korean crypto exchange Coinrail lost over $40 million tokens to hacks. According to research, the hackers got away with about $19.million worth of NPXS. Additionally, they scored further with about $13.8 million from Aston X, about $5.8 million Dent token (a mobile device ICO) and over $1.1 million Tron.
What you need to know about Privacy Coins:
Privacy coins are designed to ensure stateless financial freedom. In other words, with privacy coins, be rest assured that your financial records won’t be broadcasted to the public. So, if you are a large crypto holder that fears for your wallet safety, worry less. Privacy coins are primarily designed to solve these issues and to also grant investor with solid transaction (both investing in cryptocurrency and online spending) anonymity in a decentralized and scalable way.
Of course, Bitcoin, Litecoin, Dogecoin, Ethereum etc. are amazing as they utilize cryptography to disguise and their transactions are transparent on the public ledger. In a way, this technology is amazing but we still need to consider its associated risks. Remember that the public wallet is viewable by anyone, and also, how much paid in and out are also publicly broadcasted on the ledger. Interestingly, this might be fun for non-profit organizations, publicly transparent entities and so on, but the big question is, do you really want anyone or everyone to seamlessly see how much you have and how much you send to someone?
It is crystal clear that some mega businesses all over the globe may be much comfortable to have trade secrets; or perhaps list of top suppliers that they would prefer their identity hidden. However, worry less. Privacy coins implement the utility to hide your identity when making any transactions. Interestingly, these coins does not only give its users a degree of anonymity in a rock-solid and decentralize manner, it also cuts off the link between the sender and receiver for any given transaction (i.e. the link between the sender and the receiver is obscured or concealed); this is to prevent any tracking activity of the wallet address.
While cyptocurrencies like Bitcoin, Litecoin and Ethereum will definitely leave behind a public record of all transaction that have occurred on the blockchain, still have it in mind that there are several privacy coin in the crypto market today. We’ve singled out the most popular ones based their unique technologies, market capitalization and how they ensure complete anonymity and privacy.
Monero was originally launched in April 2014 as BitMonero. Later on, it kickoff as ‘Fork of Bytecoin and a secure private untraceable currency.’Monero symbol is XMR and it simply means ‘money in Esperanto’. Base on the fact that Monero platform is a product of Bitcoin fork, its fungibility level makes it easier to transact with users.
Interestingly, Monero effectively grants its users a firm command over the privacy of their data by obscuring transaction information within the blockchain. Consequently, the transactions information are completely untraceable, and only users have complete control over their data and their anonymity.
What are those unique features about Monero that makes it so special?
The Ring Signatures:
Ring signatures are one of the unique features about Monero that makes it astounding. They are digital signatures that are generated by bringing a group of signers together. Monero implements this digital signature to bring multiple signers into each transaction. Here, only the sender will be able to generate and send the spend key, and only the actual recipient will be able to recognize the key and spend the funds linked to it. In other words, with the ring signature in place, a high level of privacy is guaranteed.
The Ring Confidential Transaction ( Ring CT):
This is another interesting feature about Monero. The RingCT hides the amount of each transaction on Monero’s network. What RingCT does is that it creates a cryptographic proof to seamlessly reveal that the input and output amounts are equal without publicly revealing any of the actual numbers.
The Stealth Addresses:
Stealth address is another unique feature about Monero that allow its users to easily disconnect themselves from the blockchain. The stealth address is a one-time use address that is generated for every transaction. Monero also have a public address that is published on the blockchain; however, the transaction will be passed through unique stealth addresses.
How Monero Works.
It’s no longer news that Monero have some unique technological approaches to solving the problem of privacy and anonymity. Monero uses a dynamic block size and its miners have the free-will to mine bigger and/or smaller transactions depending on the volume of the network. However, if you want to purchase some XMR, you can get them on crypto exchanges such as Kraken and Monero. Monero (XMR) currently worth $120.04 per unit.
The “Z” in Zcash stands for “zero” and it is also tagged “zero-knowledge proof.” Zcash started as a ‘fork of the bitcoin blockchain’ on October 28, 2016.
Originally, it was called the Zerocoin protocol before it was transformed into the Zerocash system, and then Zcash. In May 2017, major U.S bank JPMorgan Chase announced that they would be integrating Zcash into their enterprise-focused blockchain platform.
One of the opportunities in Zcash is that its clients and retailers will be able to do any transaction without creating any major change in asset price. At present, the circulating supply of Zcash is 4,028.731 Zcash units and the price of each unit of Zcash is worth $260.49.
Zcash provides two types of keys “view key and spend key.” The view keys may be used for an audit or to share information without disclosing it to the entire public. With view keys, Zcash provides encrypted memo with the opportunity of delivering messages to the recipient during transaction, where only a ‘view key holder’ can see it. This makes it more ‘private’ when payment codes and confidential or commercial information are shared among users.
How Zcash works.
Zcash works on a zk-SNARKs protocol. The acronym zk-SNARK stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.”
Similarly, Zcash allows users to send public payment like any other cryptocurrency. Users can either choose to hide their transaction completely or even make it completely viewable to everyone.
The “zero- knowledge” scheme for private payment, fully guarantee shielded transactions in Zcash. This technology permits the production of a secured blockchain. With “zero-knowledge,” two parties can provide each other with verified information without compromising their identities during the process.
PIVX is an open source privacy-centric cryptocurrency that was forked from Dash in February 2016. It was originally called Darknet (DNET). PIVX is abbreviated for Private Instant Verified Transaction.
The cryptocurrency uses a privacy protocol called zk -SNARKs or zero- knowledge proofs which are also used in Zcash and monero. It has a voluntary feature to send private coins.
Currently, the total available circulating supply of PIVX is 56.342.444 PIVX units, and the price per each unit is worth $3.97
How PIVX works.
PIVX is completely different from other privacy coins like Zcash and Monero. It has no miners and as a result, it does not give room to incentives. PIVX can also be spent at any store that accepts it directly from your mobile wallet.
However, anyone who holds PIVX can help secure the network and receive rewards for the efforts. This is how the system operates: the system uses the coin an investor holds to verify new transaction that goes through the system.
- Verge( XVG)
Verge was launched in 2014 and was first named DogeCoin Dark. It became Verge in 2016.Verge is a privacy-focused cryptocurrency designed to offer secure and anonymous transaction.
It gives businessmen a flexible option to send and receive payments. Verge’s primary goal is to improve on the Bitcoin’s blockchain system and ensure structured and decentralized way of making payments while prioritizing personal privacy.
With Verge Wraith Protocol Technology, users can freely choose between public and private ledgers when transacting. Additionally, wraith protocol provides an option for those who prefer transaction to vanish entirely. The verge coin’s unique concept of anonymity makes it more fascinating than other cryptocurrencies.
How verge coin works.
Verge uses Tor and I2P to provide anonymity, which obscure users’ IP addresses, and other personal data. In short, all transaction is completely untraceable.
Verge does not permit exchange with fiat currencies like USD Euro and the likes. It does not also support pre-mining too; this cryptocurrency is developed through community funding.
Transactions are without delay through the use of Simple Payment Verification (SPV) and the average time of transactions gets dropped to approximately 5 seconds.
Unlike other cryptocurrencies, verge is not funded by ICO or pre-mining, but funded by the support of thousands of community members. At present, the total circulatory supply of verge is 14.997.869.020 verge units and the price of each unit is $0.021140
Dash was originally founded in January, 2014. It was formerly known as Darkcoin and XCoin. It is referred to as an open source peer-to-peer cryptocurrency based on Bitcoin software that aims to be super fast, user-friendly, and scalable during transaction.
Dash is a decentralized autonomous organization powered by a Sybil proof decentralizes governance and funding system known as Decentralized Governance by Blockchain( DGBB). It is also referred to as ‘Treasury System.’
Dash is based on a PoW system ( Proof-of-work system) that implements two type of nodes on the network. ‘Masternodes’ and ‘Miner.’ Masternodes, just like it sounds, has the capability to perform the role of both ‘Instant send’ and ‘Private send.’ Masternodes are introduced to the network for the purpose of validating transactions. Here, transactions are untraceable and several transactions can be ran at once. In fact, it also provides an opportunity where users can opt for multiple rounds of mixing through private send.
Currently, to mix using private send requires at least three participants. And to take part in masternodes, one has to invest at least 1000 dash token.
Dash is currently one of the top 15 cryptocurrencies in the crypto market with the total circulatory supply of 8,101,322 units and the price for each unit is $308.24.
How Dash coin works.
Dash coins work the same way as Bitcoin, but unlike the single-tier networks where user disseminate transactions to the network and then miners put these transactions to the blockchain. Dash also utilizes two-tier network that contains masternodes.