What are the best privacy coins?
Cryptocurrencies are usually pseudonymous, although they are not always anonymous. Blockchains are used to run Bitcoin (BTC) and other properties, with each exchange being freely available online. During a transaction between two or more individuals, funds are transferred to separate wallets, each of which is identified by a sequence of characters.
With any of these addresses and transactions available to all, there is a certain degree of trackability, particularly if a wallet moves funds to an exchange that requires Know Your Customer authentication.
Privacy Coins & Cryptocurrencies
Certain cryptocurrencies, which are often known as privacy coins, secret coins, or anonymous coins, aim to hide transaction details in order to provide consumers with greater privacy. Why does anyone want secrecy if they are not engaging in any illegal activity? Two factors may be a personal choice or a belief in privacy as a fundamental human right. Cash is mostly kept secret. Any transaction is not registered elsewhere and accessible to us with the click of a button.
There are many strategies for adding privacy to Bitcoin, including peer-to-peer exchange, but several crypto assets solely rely on privacy more specifically with their technology. Monero (XMR), Zcash (ZEC), Verge (XVG), Beam, and Grin are some well-known privacy assets in the crypto space. Dash is also on the list because it provides more privacy, including the fact that the coin is not legally listed as a privacy resource.
In this thread, we’ll look at the five best privacy coins and their potential to reclaim mainstream attention. Let’s dive into it:
- Monero (XMR)
Monero is extremely famous, owing to its long and rich history. In particular, Monero’s name is as well-known as the names of other major cryptocurrencies such as Bitcoin and Ethereum.
Monero is a top twenty cryptocurrency with a $3.9 billion market value, as per Coinmarketcap numbers. Despite its age, XMR is a cryptocurrency that, for unexplained motives, appears to be the first to move throughout the sector.
Monero’s popularity in terms of anonymity can be attributed to features such as ring signatures and stealth emails. In contrast to other campaigns, Monero imposes anonymity on a fundamental principle and does not offer it as an alternative path.
In 2014, the project began as a Proof of Work-based Bytecoin fork that anonymizes transfers by making it difficult to identify the original recipients and senders.
Monero has done such a good job in the field of privacy coins that the IRS has agreed to give a $625,000 bounty to someone who can breach the project’s privacy controls. The fact alone should be enough to convince you that XMR is the best option in this particular market.
- ZCash (ZEC)
ZCash is a cryptocurrency similar to Bitcoin but still has privacy options. It should be noted that anonymity is only possible and that the ZCash blockchain splits transfers into private (z-addresses) and open (z-addresses) (t-addresses).
To promote anonymity, ZCash employs a cryptographic technique known as Zero-Knowledge Evidence, which allows users to ‘shield’ their transactions. In fact, the function entails users sending and receiving transfers without being able to see the opposing party’s address. The technology also conceals the transaction value from all observers.
According to Coinmarketcap, Zcash is ranked #51 on the crypto leaderboard, with a market cap of $1.3 billion. To put it simply, the project is a less common choice for those who do not want to use Monero.
- DASH
DASH, also known as digital cash, is another cryptocurrency with a unique privacy function. About the fact that the project’s top priority (and feature) remains pace, DASH provides a fascinating method of anonymizing transactions that is comparable to Monero and ZCash.
Users may use the PrivateSend function to submit a transaction privately. PrivateSend, which is more expensive than regular transfers, assists consumers by combining coins without relinquishing custodial access.
The mixing is achieved by master nodes, who are consumers who profit from their status by staking a large number of DASH coins.
DASH is ranked #41 on the cryptocurrency leaderboard, with a market value of $2.2 billion, according to Coinmarketcap. The currency was once one of the most common cryptocurrencies in 2017, but its valuation and demand have since declined.
- Grin
Don’t worry; there are new privacy coins that are not Monero, ZCash, or Monero.
Grin, a privacy coin that establishes the highest level of anonymity by not storing addresses or transaction numbers, was born with the introduction of an advanced blockchain platform called Mimblewimble.
Mimblewimble is a Proof-of-Work implementation in which only network users have the ability to ignore transactions. There are no known or reusable addresses, and all transactions appear to outsiders looking into the blockchain as randomised bits of transactions.
Fundamentally, the model generates a smaller blockchain history that is easier to download, validate, and synchronise. Since nodes delete redundant transaction records, no one may determine who sent or received a blockchain payment.
Grin is genuinely mature, but its sophistication continues to have the opposite consequence of discouraging potential users. The token was unveiled in 2019 and is yet to achieve a significant rate of acceptance. Grin is ranked #530 on Coinmarketcap’s leaderboard and has a market cap of just $30 million.
- Beam
Last but not least, another privacy coin that uses the MimbleWimble technology. We all know what MimbleWimble does, but let’s focus on the key distinctions between Beam and its biggest competitor Grin.
Beam is a MimbleWimble network implementation that started development two years after Grin. Beam is something like a corporate initiative overseen by an Israeli corporation. Grin, on the other hand, is a decentralised project that is fully dependent on the group and its open-source governance model.
The variations in technology can be seen in scripting, mining, and token availability.
Grin developers use rust to write, their nodes mine using the Cuckoo Cycle algorithm, and GRIN tokens have an infinite supply of one token generated per second.
Beam uses C++ for scripting, Equihash for mining, and has a token reserve of 263 million BEAM tokens.
Beam does much better than Grin, ranking #422 on Coinmarketcap with a market cap of $48 million.
- Wrap up:
When DeFi and ICOs were not yet available, the most sought-after cryptocurrencies on the blockchain were privacy coins and store-of-value properties. Although the market for privacy coins has waned, they still constitute a group of digital assets that will undoubtedly see widespread acceptance in the future.
Since first-generation blockchain networks lack functionality that fully anonymizes their users, privacy coins are essential.
As a result, new pioneers have opted to introduce such protocols on their own to create anonymity as a fundamental component of blockchain technology.
Experts claim that as crypto enthusiasts face substantial regulatory challenges, the market for privacy coins will awaken. Investors will undoubtedly turn to privacy coins as a means of safe haven if sanctions, taxes, or other forms of pressure escalate as blockchain adoption grows.