Amongst the undeniable advantages of cryptocurrencies that made them so popular are security and privacy. For the first time, users got an opportunity to override banks and gain control over their investments as well as protect their identities if needed. However, recent data privacy concerns have also affected the crypto world: high Bitcoin standards became insufficient for some members of the community. This is how the best privacy coins have emerged in the modern cryptocurrency market.
Bitcoin was originally launched as a secure and decentralized way of payment but it appeared to have problems with transaction privacy, high fees, and processing speed. When users perform financial operations on the Bitcoin ledger, they leave two forms of evidence: those visible on blockchain and those that aren’t. Blockchain-based data reveals data which is able to link different transactions among each other. Private information such as identity is not available on the blockchain and treated as “external knowledge”. However, when traders send or receive funds they automatically leave their private information which connects their personal information to a transaction they carry out. This is how interested parties can figure out how much BTC users have, how they manage their funds, and whom they purchase their cryptocurrencies from.
The openness of Bitcoin transactions means that the system is vulnerable to unauthorized tracking and monitoring. It disturbs those members of the cryptocurrency community who acknowledge the technology behind Bitcoin but seek better privacy.
Choosing the top privacy coins from a long list of options is not an easy task for a beginner. At the same time, adding them to your investment portfolio is a smart strategy that can be beneficial in both short and long run. We are here to help you to select the best privacy coins which will become a great addition to your crypto portfolio.
What is a Privacy Coin?
If in the right hands, blockchain can greatly advance many spheres of modern life. However, its openness and accessibility make many users raise important security concerns. Specialized services, scammers, and even individual users can freely trace transactions and check the sender’s identity when trading digital assets.
As a result, many cryptocurrency enthusiasts have devoted themselves to the development of top privacy coins that would enable users to better hide their identities and operations. Privacy cryptocurrency is an altcoin that protects users’ information — their names as well as digital coins that are stored on their wallets.
These are decentralized payment platforms with high protection levels and an advanced settlement layer that is optimized through the utilization of cryptographic algorithms. Due to advanced protocols and security instruments, it becomes complicated or totally eliminating the possibility to track operations performed within the network.
The best privacy altcoins put a great emphasis on transaction security which empowers users to confidently trade their crypto funds. The quantity and quality of privacy coins are constantly growing in the cryptocurrency market. Developers with experience often experiment with numerous protocols and advanced features to offer greater confidentiality and anonymity. That is why it is sometimes hard to distinguish between the best privacy coins with great performance and other minor coins.
The most widespread cryptocurrencies such as Ethereum or Bitcoin publicly disclose user transaction information, which signifies that anybody is authorized to trace your operations by easily checking your wallet address. In contrast to well-established cryptocurrencies, top privacy coins suggest advanced tools to support user secrecy.
In modern days, people care about their financial privacy more than ever before. The best privacy coins offer an innovative solution to the long-standing issue of crypto-security. Many users also consider them as an alternative way for directly avoiding taxes for the reason that government agencies can not monitor their financial operations and the exact place where they keep private altcoins. Privacy altcoins have growing trading volumes, prices, and liquidity and the numbers are predicted to multiply in the coming years.
Is DASH a privacy coin?
Many people mistakenly refer DASH to the number of privacy coins. In fact, this currency cannot be called anonymous by default. However, the developers have introduced a new technology that makes it possible to make a hidden transaction. The PrivateSend function ensures the confidentiality of your funds.
The unique decentralized network of Masternodes servers provides this opportunity to the project. DASH breaks transaction inputs down into standard denominations and mixes them with the inputs of other people. And your coins ever leave your wallet.
The DASH team also made a separate statement that the coin is not a privacy coin. DASH is a completely public blockchain. Its privacy is not based on encryption.
Why do we need privacy coins?
The peculiarity of cryptocurrencies is that they are absolutely transparent systems, where everyone can see all transactions and the number of funds in any user’s wallet. The open ledger has become an innovative solution, as it eliminates the possibility of fraud in principle. After all, anyone can view any block of the blockchain’s chain. However, there are some nuances that should be taken into account.
The fact that the amount of funds in the wallet, the number of transfers, senders, and recipients can be checked by any user excludes confidentiality.
For public organizations, this does not pose any threat, but not all users or companies are ready for this. Many people do not want outsiders to know the amount of their capital or the transactions they make, and most importantly with whom they make these transactions.
Open cryptocurrencies do not allow you to keep commercial secrets or contacts of customers with whom companies work. Agree, many do not want to give out this kind of information.
Privacy coins have become a great solution because they allow you to maintain a certain degree of anonymity in a decentralized, but very reliable way.
Privacy Coin comparison, What to choose?
Monero (XMR) is a revolutionary privacy coin that prioritizes security principles as its key features. This altcoin involves an innovative form of cryptography to make sure that an absolute number of its transactions become inconspicuous and unlinkable. A big number of crypto enthusiasts claim XMR to be the best privacy coin that offers instruments like stealth address, Tails OS, and ring signature for enhanced security. Initially created as a Bytecoin fork, Monero also offers an alternative mechanism of processing transactions by dividing the deposits into several smaller amounts and dealing with every amount as a different transfer.
ZCash (ZEC) is a decentralized privacy coin focused on delivering enhanced transparency and anonymity. This coin is built on zk-SNARKs, or Zerocoin protocol, which makes all transactions 100% transparent and protected. The network is kept secure and does not disclose the identity of users, passwords or amounts involved. Information on transactions is encrypted without the need to disclose spend-parties. Moreover, users can utilize zk-SNARKs technology to ensure that the operation was open and transparent.
Zcoin (XZC) is an open-source digital coin focused on security and anonymity. Based on the innovative technology called Sigma, this privacy coin provides better scalability and eliminates the requirement of secure setup. Because the transaction record is not linked to particular coins, the transfer of funds can only be confirmed by the two parties participating in trading (sellers and recipients). Lelantus, a new anonymous protocol card, was also launched by Zcoin project to upgrade Sigma’s technical performance and openness.
Privacy coin ICO
ICO is a way to raise capital to implement your idea in the field of cryptocurrencies. Let’s say you have a technology that you need funds to implement, you release something like a project for a future cryptocurrency and offer third-party people to invest in it in exchange for coins of this cryptocurrency. Users invest in the hope that in the future the project will be successfully implemented, and these coins will significantly increase in price. It turns out that ICO coins are new cryptocurrencies, but actually only in the future.
Let’s look at the most promising ICO privacy coin list.
Ditcoin (DTC) at the moment, is the new privacy coin with a price of $ 0.0003. Ditcoin ICO project was successful. Ditcoin is a business-driven cryptocurrency based on the creation of assets and communities. DTC guarantees absolutely untraceable transactions and 100% confidentiality.
TokenPay (TPAY) ICO was a burst privacy coin. It was sold out in the shortest possible time and entered the market. Why did this happen? The idea of the project is to create an anonymous crypto bank, using the advantages of traditional banks and modern technologies. At the moment, the token is traded on exchanges at a price of $ 0.06. But many experts are predicting a rise to $ 0.1 already this year.
Whole Network (NODE) ICO plans to introduce a completely new blockchain system to the world. The peculiarity is that they plan to allow users to decide whether to open or close their data to the network in the future. This will ensure that they have the right to privacy at any time. The project has a good potential, so you can study the information and even become an ICO investor.
Apollo privacy coin
Apollo (APL) cryptocurrency was declared a revolutionary project from the very beginning. The main feature of the Apollo platform is the Olympus protocol, which combines the functions of the platform and has IP address masking features that can help the user hide their IP address and get better protection and provide more privacy on the Internet.
The Olympus protocol combines many features of existing coins in one powerful ecosystem. An additional feature in the field of information security is encrypted messages and multi-segment transactions. If you don’t think you’re secure enough, you can even use coin shuffling to confuse people who want to track your spending.
Godex.io for secure trading
Finding a reliable anonymous cryptocurrency exchange is no less important than choosing a coin for your investment portfolio. With over 200 different digital coins to choose from, Godex.io offers fast trading of cryptocurrencies without the need to disclose personal information of users who do not need to confirm their identity and register an account in order to start trading. Monero, Dash, PIVX, zcash and many other top private coins are also available on the site Godex.io at their best exchange rates, which are fixed during transaction processing.
Which is the safest Cryptocurrency?
The absolute leader in privacy at the moment is Monero. An innovative form of cryptography allows you to hide all transactions. Experts, reputable resources, and users claim that XMR is the best privacy coin that offers tools like stealth address, Tails OS, and ring signature to enhance security.
However, it is worth noting that all privacy coins provide greater information security than any other cryptocurrencies with an open ledger.
Which Cryptocurrency is most anonymous?
The Monero team claims that this cryptocurrency is the most anonymous in the crypto world. But the list of all the coins presented above provides a sufficient degree of anonymity so that any of your personal information is completely protected. It is also worth taking a closer look at the fairly new Apollo currency, which has great prospects.
Is Bitcoin a privacy coin?
Bitcoin is not an anonymous coin. BTC is an absolutely open currency that allows you to view absolutely any transactions or funds in any wallet. At the same time, the protection of cryptocurrencies from fraud is extremely high, so you should not be afraid that someone will be able to steal your funds. But you won’t be able to hide information about money transfers.
Can the government track Cryptocurrency?
Since Bitcoin and most other cryptocurrencies have a completely open ledger, access to it cannot be closed to any user or to the government. However, at the moment there is no single mechanism for controlling cryptocurrencies, so it is worth studying the legal regulation of cryptocurrency capital in your country to understand how the government can use information about your crypto transactions and fund.
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Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.