One of the things that attracted both revolutionary minds and investors about cryptocurrencies was their “untraceable” qualities. Anonymous funds transfers were probably the first thing people learned about Bitcoin. Satoshi Nakamoto’s whitepaper talked about security and privacy coins that will help the people against the monetary system. This newfound freedom was something only people with Swiss bank accounts or Offshore companies knew about. It’s needless to say, that this wasn’t something politicians and banks embraced. On the other hand, those who had ideas and were sick of the debt system rejoiced.
After Bitcoin went mainstream, governments around the world spent a lot of resources on trying to figure out and trace Bitcoin transactions. This extended to many of the leading cryptocurrencies and even though most people believe that cryptocurrencies are anonymous, this isn’t entirely true. By linking transactions to fixed wallet addresses and by using the public kept record of every transaction, most popular cryptocurrencies provide governments and institutions with all the tools they need to quickly remind those hiding behind anonymity that they are not untouchable.
Privacy Coins have many security features
Most governments are already compiling databases, but privacy coins like Monero are specialized for security. These privacy coins, do not offer a public record and transactions cannot be linked to wallets. These Tokens grant users a bigger form of anonymity and those who want the best odds at staying anonymous, they should instantly migrate to privacy coins. The most popular choice is of course Monero. It’s the most well-known of all privacy coins and it has entered the top 10 most valuable cryptocurrencies since its launch back in April 2014.
Not only it is the most known, but it offers the most security features from all the privacy coins. The CryptoNight PoW algorithm is the main difference between Bitcoin and Monero. The algorithm uses a mix of ring signatures and stealth addresses. These tools are used to bury the sender’s address between the addresses of other users. Additionally, it also hides the amount of digital currency that is transferred. This has probably been the main reason that Monero has been incredibly popular with people or organizations looking to evade governments and government organizations.
This unparalleled ability to preserve anonymity has reflected in Monero’s price growth. The privacy coin’s price increased by 2883% from January 1st to December 31st 2017. This is a growth ranging from $12.3 to $358. Even though bitcoin was incredibly more popular and reached a price of $20 000, it’s growth for the same period was 1357%. Even though the 2883% is enviable, it’s nothing compared to the 9000% growth achieved by Dash during the same time period.
Dash is another altcoin, that has specific privacy-supporting qualities. If we look at the total market capitalization, it’s the 13th most valuable digital currency. The PrivateSend feature whirlpools addresses together in order to blur the origins and end destinations. This process makes it ridiculously for any party willing to track the transaction. There is a large choice for everyone interested in privacy coins. Users who don’t hold any privacy coins can still benefit from the many different mixing services, which are available for non-privacy or tradition digital coins.
One example is the set of anonymization protocols. They give receivers and senders of Bitcoin the ability to mix-up their transactions. The transactions are mixed with other transactions of other users and this in turn makes tracking very difficult. Some of those protocls are CoinJoin, bestmixer.io, Dark Wallet and SharedCoin. All of these protocols provide traditional coin holders some of the qualities of privacy coins. So despite the increase of crypto tracking, cryptocurrency users can still breathe calmly. Most systems currently used rely on information disclosed from crypto exchanges and the public ledgers.