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The 6 Most Private Cryptocurrencies

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Private Cryptocurrencies

Private Coin: What Is It?

Private Cryptocurrencies: With over 14,000 different coins on the market, we are becoming more demanding of what they should have to offer. We are no longer satisfied with the average. We need only the fastest Ethereum transactions, the best Ravencoin wallet, and the most convenient exchange platforms.

And our privacy standards have risen as well. We cannot view bitcoins and other cryptocurrencies as private. Their owners’ data can be obtained by finding out how much one wallet owner sent to another, or the total amount of cryptocurrency in the wallet. You can also find out the IP addresses of the owner of the bitcoin, even if he or she uses secure networks.

How to completely hide personal addresses and amounts?

The shortcomings of the first cryptocurrencies pushed many developers to create new private coins. They are used in anonymous blockchain transactions by keeping their origin and destination a secret. With the built-in mixing mechanisms of private cryptocurrencies, the owner’s identification is very difficult, sometimes almost impossible.

Moreover, users may choose an anonymous cryptocurrency exchange to remain invisible in transaction processes.

According to Coinmarketcap, there are over 80 private cryptocurrencies on the market. Let’s analyze the top 6 most popular private coins.

DASH

The Dash cryptocurrency gained popularity thanks to its PrivateSend token mixing mechanism. The essence of the mechanism is in mixing random coins. That allows you to hide the connection between the sender and the recipient. Mixing takes place at the expense of masternodes, special servers on the Dash network. The masternodes receive mixing requests without information about the origin of the coins. That ensures maximum anonymity.

How do these anonymous transfers work?

First, the transaction is divided into several parts. Then, a mixing request is sent to the masternode, and with enough requests, the mixing begins. After that, the masternodes direct the wallets to send coins to the corresponding recipients.

A huge advantage of DASH is its developers’ desire to make it applicable as a regular payment method. Dash has a very low transaction fee (about $0.01-0.03), and the InstaSend technology enables instant transactions.

Monero

Monero is the only cryptocurrency where every user is completely anonymous. The sender, the recipient, and each transaction amount are hidden by three technologies:

  • Ring Signatures: during verification, the mechanism asks for several keys;
  • Hidden (Stealth) Addresses: automatic disposable transaction addresses;
  • Ring CT: a protocol to hide the amounts, sources, addresses, and transactions destinations.

Thanks to these mechanisms, the disclosure of anonymity will require tremendous efforts and technical expertise. Thus, Monero users can be sure of their data privacy.

Horizen

Horizen is the third generation of blockchain platforms built to ensure client privacy. This blockchain structure is multi-layered. It has secure nodes and supernodes that secure and maintain the network’s operations. The system also runs ZenChat, which allows users to exchange encrypted messages of up to 512 characters within the network. Horizen has the following advantages:

  • provides anonymity thanks to end-to-end encryption at the node level;
  • decentralized network based on distributed and reliable nodes that protect its participants’ confidentiality;
  • publications and messaging security due to network anonymity.

Horizen offers these benefits thanks to the Zero-Knowledge Proof (ZKP) protocol. According to Robert Viglione, the CEO of Horizen Labs, ZKP is the leading solution to deal with concerns related to privacy and security.

Beam

Beam is an anonymous cryptocurrency based on the MimbleWimble protocol.

When making a transaction using the Beam token, you can hide the wallet address of the parties involved, and the transaction amounts. By default, no sensitive information goes to the blockchain.

One of the mechanisms that ensure confidentiality is the Dandelion network mechanism. In this operation, the initiator transfers their transaction to only one peer, who transfers it to another peer, and so on along the chain. After a certain number of such moves, the last peer sends the coins to the recipient. But since this peer is already far from the creator of the transaction, it will not be possible to follow the chain.

Moreover, due to the Beam team’s active work on further projects, we can predict a gradual increase in Beam’s popularity and price.

GRIN

The Grin cryptocurrency is also based on the MimbleWimble protocol, the main purpose of which is to protect privacy. There are no addresses in the MW blockchain, which means that all such transactions look random from the outside. It will not be possible to find any connections between them.

Grin is led by anonymous developers who use an algorithm similar to Proof-of-Work (PoW) called Cuckoo Cycle. It allows for highly decentralized mining at the expense of memory bandwidth.

ZCash

ZCash runs on the Zerocash protocol with the zk-SNARKS mechanism. This mechanism provides confirmation of the authenticity of data without disclosing personal information.

There are two ways to conduct transaction operations using ZCash tokens. One of them is transparent — all information is recorded in the blockchain and can be available for everyone. The second option is private, where the only information that will stay in the blockchain is public addresses. All other confidential information remains hidden.

Conclusion

Has the new era for privacy coins begun?

It turns out that cryptocurrency doesn’t equal anonymity. At the same time, there are coins on the digital asset market that provide total confidentiality.

It looks like the token owners will like the privacy feature of cryptocurrencies for a long time. And anonymous cryptocurrencies are likely to pose serious competition to both Bitcoin and numerous altcoins.

 

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