Crypto's best secrets kept?
Whilst some may consider Bitcoin a haven for criminals and for those who are generally up to no good, the advent of privacy coins has raised the hackles of many observers and people critical of cryptocurrencies. But hey, what's wrong with wanting to protect your data and maintain your anonymity online? It doesn't mean that you are a thief, a drug dealer or, in Uncle Sam's favorite words, a money launderer.
Let's take a quick look at a few privacy coins.
One of the most well known privacy coins is Monero (XMR). The strong marketing abilities of the team have made it the go-to coin for confidential transactions. This is done through the use of stealth addresses and RingCT which both bring a high degree of privacy.
Stealth addresses make sure that there are no links between a recipient's address and that belonging to anyone else on the blockchain. This is achieved by a random one-time address being generated for each transaction by the sender. Since these addresses are unique, no one can see if anyone else has sent coins to that recipient. So, linking anything on the blockchain is prevented by stealth addresses. However, when and where the coins are moved to by the recipient, can be traced by identifying outputs on the blockchain. This is where ring signatures come in. They have the ability to mask outputs so the sender cannot tell if coins have been moved by the recipient. This ability to be untraceable is achieved through transactions having been grouped together with others on the blockchain, thus masking the outputs being sent.
But there is even more to it than that….
Monero have pioneered the development of Ring Confidential Transactions (Ring CT) which, on top of confidential transactions, is a cryptographic tool that hides the amount being transacted. The network can still verify the amount but actual details are not revealed. Due to the fact that transactions cannot be linked or traced, coins will not be tainted due to their transaction history. Monero is a great coin and currently trades around $64.
Zcash (ZEC) is another privacy coin which uses the cutting edge technology of zero knowledge proofs and zk-snarks to mask transactions. Briefly put, zero knowledge proofs are the ability to prove something is true without conveying anything other than it being true.
By using zk-snarks, users can hide their transactions from the rest of the network. This is a chosen action by the user as ordinary unshielded transactions can also be made which will be visible in the same way as Bitcoin transactions. Basically the sender sends out encrypted notes onto the blockchain whilst the receiver scans the blockchain with a viewing key for notes addressed to them.
important aspect of Zcash is that spent notes cannot be connected to
the transaction in which they were created. JP Morgan have expressed
some interest in Zcash, so it does carry some weight as a credible
coin.It is currently trading around $38.80.
Particl (PART), which recently launched its decentralized marketplace, is more than just a coin….
'Particl is an open source eCommerce platform that enables the buying and selling of goods online without the users needing to submit or store any personal information.'
With smart contract escrows, there is no requirement for buyers and sellers to exchange personal details, either with each other or with a trusted third party. No escrow agent also means no additional commission charges. Big savings here when compared to traditional centralised marketplaces. You know who we mean...
Running on a distributed ledger, an infinite number of markets can be created on the platform, each with their own unique listings. Anyone who sets up one or more of these markets can restrict who gets to have the viewkey. So if you want to protect your supply, purchase and manufacturing chain from competitors, a B2B and B2C setup which can be customized and protected is a great option.
The privacy coin itself, PART, prevents 3rd party analysis of any transaction activity on the network. Because the escrow feature locks up coins with each transaction, the circulating coin supply is reduced thus pushing up the price. The coin uses proof of stake consensus so the staking rewards to holders quickly experience growth.
Overall another great coin and it currently trades at around $1.50. That's not a typo. $1.50 means it is vastly undervalued. This coin can do everything that all other privacy coins can achieve, but on top of that, because there is a fully functioning, decentralized, multi-faceted marketplace, the only direction for this coin's value is up.
Forked from Bitcoin, DASH (DASH) is an open source peer-to-peer coin. It runs on a 2 tier structure with miners on one tier securing the network and masternodes on the other tier where instant and private transactions are handled. Its Instant Send feature can deal with large volumes of transactions whereas Private Send is a coin mixer. Origins of the funds are concealed by mixing the inputs with other users. You constantly have control of your funds as coins don't leave your wallet during the process.
Once two other users need the same denomination to be mixed, the masternode mixes all of these inputs and instructs the wallets of the three users to pay the transformed inputs back to themselves. Funds can be further concealed by repeating the process. Dash currently trades around $74.