Most cryptocurrencies are transparent and open to all internet users since every transaction is publicly documented. But even if this is beneficial in terms of transparency, it poses a problem in terms of privacy.
Although transparent cryptocurrencies hide the user’s name, they still reveal the user’s public address which can be easily linked to the user’s identity through their public key. As a result, your financial activity can still be traced and your identity can still be known.
This is where privacy coins come in. These are coins that hide the user’s as well as the transaction’s information. To know more about privacy coins, Casino Days has created a list of all FAQs, check it out down below:
Are privacy coins legal?
The legality of privacy coins varies depending on the country you’re in. In countries like Japan and South Korea, privacy coins are banned but in other countries like El Salvador, they leave it in a grey legal area.
Even if your country allows privacy coins, it’s vital to remember that buying them on a crypto exchange situated in the United States will increase the possibility of its anonymity and privacy being removed by the law since the United States has been working on completely removing anonymity from any crypto transactions.
The strategies private coin uses
Privacy coins give anonymity to your transactions using specific cryptography tools such as coin mixers and stealth addresses, to name a few. Learn about their unique functions, purposes and outcomes below:
One of the tools privacy coins use is Coin mixers. This is a type of program that merges several transactions into one. The system then splits that single transaction into an appropriate amount then sends it to each recipient.
Stealth address is another thing privacy coins use to keep transactions anonymous. What this does is create a new address every time a transaction is made. A great cryptocurrency that uses this is Monero (XMR). They depend on a dual-key stealth address protocol that keeps transactions and user information private.
Next up is the use of the Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. In other terms, it’s called Zk-SNARKs. This system allows the blockchain to validate the legality of every transaction without the need to identify the users or provide any transaction details.
Last but not least is the use of the ring address. What this system does is connect several digital wallet addresses so it isn’t linked to only one specific address. So anyone who tries to access this transaction’s details won’t be able to figure out which of the numerous addresses are the sender and receiver.
Who uses privacy coins?
Most people choose to use this for several other reasons like hiding one’s wealth, not wanting others to know how they spend their money and so on. But despite these reasons, some authorities have banned privacy coins in fear that they might fuel finance terrorism, illegal finance management and money laundering.
Why are most cryptocurrencies not private?
The reason why most cryptocurrencies are not private is because of the regulations that need to be followed such as Anti-Money-Laundering (AML), Know Your Customer (KYC) and Combating the Financing of Terrorism (CFT).
These regulations require users to prove their identity by presenting personal information before they can transact. By implementing these KYC procedures, regulators and crypto exchanges can rest assured that no illegal transactions pass through.
However, this also puts privacy coins in hot waters since they don’t include personal information when transacting. That’s why numerous exchanges have chosen to delist privacy coins and they’re becoming hard to find.
Best privacy coins to know about
If you’re interested in using privacy coins, a good place to start is by knowing what to get. There are tons of privacy coins available but Casino Days has created a list of the best ones. Check out the list down below for privacy coins to consider:
Monero is by far one of the most popular privacy coins in the market. It’s known to provide the best anonymous transaction among the rest plus it’s also 26th on the list of largest cryptocurrencies in the market, valued at $2.8 billion. This uses the stealth address to keep details confidential. So if you’re looking for the best privacy coin, this is one to consider.
Zcash is another reliable privacy coin in the market that mainly uses the Zk-SNARKs tool. This allows users to keep the transaction details shielded from other viewers on the blockchain. This is ranked 60 in the overall market of cryptocurrencies and is valued at $1.49 billion with a current trading price of $122.68 per coin.
Another privacy coin to consider is Dash. With this cryptocurrency, you can choose whether or not you want to set your transactions to private or public with its PrivateSend feature. This is ranked next to Zcash and on its 61st place on the list, this cryptocurrency is valued at over $1.46 billion and $142.60 per coin.
Horizen is another privacy coin to consider getting. This crypto protects transactions of Z-Addresses and public T-Addresses but note, transactions that are done by a Z-address to a T-address will still reveal the amount that was sent. This is ranked 83rd on the overall list of cryptocurrencies and is valued at $776.56 million and is worth $68.93 per coin.
Last but not the least, Verge. This is another great privacy coin to consider since this uses The Onion Router (TOR) and Invisible Internet Project (I2P) that conceal and keep the user’s information private. This surfaced on the web when it was known as a way to make transactions for a popular adult website. Currently, it’s ranked 111th on the entire cryptocurrency list and is valued at $393.63 million with an exchange rate of $0.024 cents per coin.