jpgfactory / Getty Images
Cryptocurrency was all the rage in2022, no doubt in part to the incredible gains that some coins have posted over the past few years. Many investors that had never thought of buying cryptocurrency are now taking a closer look at the asset class. But whereas the financial press mainly focuses on the most popular coins, there are hundreds of alternative options in thecryptocurrency space. Many of these coins have advantages over names likeethereum or bitcoin, particularly concerning privacy.
What Is the Meaning of Private Crypto?
Although the blockchain technology that coins like bitcoin use is meant to be secure and anonymous, some coins manage to keep transactions even more private.These untraceable cryptocurrency coins use special technologies to hide the identities of users. They also often hide transaction amounts and transaction senders and receivers. This can make transactions untraceable.Some coins that top the list of the most private and secure are:
Read on to see how some of these alternative coins achieve this level of security.
1. Beam (BEAM)
A lot of the terms in the crypto world may seem unusual to the casual investor. Beam is a great example, as it uses the MimbleWimble and LelantusMW protocols which operate in the world of confidential decentralized finance. Beam is focused primarily on security, as transactions are private by default, and addresses are not stored in the blockchain. Although it uses the same unspent transaction output model as bitcoin, beam’s values are encrypted by so-called “blinding factors,” giving it an extra level of security.
2. Monero (XMR)
- Coin price:$163.15 as of Jan. 18, 2023
Monero is a private digital currency that allows users to be their own bank. Monero’s security technology hides transactions and users so that no one can see any individual user’s wallet balance or activity. This is what separates it from more mainstream coins with transparent blockchains, like ethereum or bitcoin. Monero’s creators state that their coin is the only cryptocurrency that makes every user anonymous by default. The amount of every transaction, in addition to the identity of the sender and receiver, is hidden through three specific technologies: Ring Signatures, RingCT and Stealth Addresses. As every transaction is private, it can’t be traced.
Investing for Everyone
3. Horizen (ZEN)
Zen is the native cryptocurrency of Horizen, which uses Zendoo technology to allow developers or businesses to create their own public or private blockchains. Zen is a proof-of-work, Equihash-based cryptocurrency that offers two different types of addresses: Z-Addresses and T-Addresses. Z-Addresses are completely private and anonymous and are known as shielded transactions. T-Addresses are public and transparent, used for making bitcoin-like transactions on the blockchain. Users can choose which type of address they prefer if they want to control their privacy.
4. DASH (DASH)
- Coin price:$47.31 as of Jan. 18, 2023
Dash is a payment cryptocurrency that, as the name suggests, is meant to be a nearly immediate form of transfer. Dash is what’s known as a “fork” of the Bitcoin protocol, except it provides additional privacy features and has negligible transaction fees. Dash uses a two-tier blockchain network that includes both miners and masternodes. The purpose of the masternodes is to functionalities such as PrivateSend and InstantSend, which provide both untraceable and anonymous transactions. Dash, created in 2014, was the first private cryptocurrency.
5. ZCash (ZEC)
- Coin price:$43.15 as of Jan. 18, 2023
If you’re an Edward Snowden fan regarding privacy, you might want to take a look at zcash. In 2017, the infamous whistleblower supported zcash as “the most interesting alternative” to bitcoin. As with some other coins, zcash offers two types of transactions: shielded and transparent. Zcash offers enhanced privacy via “zk-SNARKS,” which stands for “zero-knowledge succinct non-interactive arguments of knowledge.” Although complicated, what matters to the average user is that zcash tries to improve the Bitcoin blockchain with enhanced security measures and supports fast block times, low fees and large block sizes.
Final Take
If you are concerned with privacy when it comes to your investments, it might be time to switch your crypto over to more secure and anonymous options. Keep in mind that the crypto market is extremely volatile as of late and you should conduct thorough research before making your investment.
Investing for Everyone
Chris Ozarowski contributed to the reporting for this article.
Data is accurate as of Jan. 18, 2023, and is subject to change.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- CoinTelegraph. 2022. "Are Bitcoin transactions anonymous and traceable?"
As an enthusiast and expert in cryptocurrency and blockchain technology, I have a comprehensive understanding of various aspects of the crypto space, including its underlying technologies, privacy features, and diverse range of coins. I've stayed updated with industry trends, developments, and the functionalities that set different cryptocurrencies apart.
The article discusses the surge of interest in cryptocurrencies in 2022, largely attributed to the remarkable gains some coins have experienced over recent years. It highlights the emergence of alternative cryptocurrencies that prioritize privacy, distinguishing themselves from mainstream coins like Bitcoin and Ethereum. The focus is on the significance of privacy in the crypto market and introduces five specific privacy-focused cryptocurrencies: Beam (BEAM), Monero (XMR), Horizen (ZEN), DASH, and Zcash (ZEC).
Each mentioned cryptocurrency employs distinct privacy protocols to ensure anonymity and security:
-
Beam (BEAM): Utilizes MimbleWimble and LelantusMW protocols, enhancing security with default privacy settings. Transactions are kept private by encrypting values using "blinding factors."
-
Monero (XMR): Positions itself as a private digital currency allowing users to maintain complete anonymity by concealing transaction details, sender and receiver identities through technologies like Ring Signatures, RingCT, and Stealth Addresses.
-
Horizen (ZEN): Employs Zendoo technology, offering both private (Z-Addresses) and public (T-Addresses) transaction options. Users can choose their desired level of privacy.
-
DASH: Originating as a Bitcoin fork, it introduces additional privacy features like PrivateSend and InstantSend through a two-tier blockchain network involving masternodes.
-
Zcash (ZEC): Supports shielded and transparent transactions, enhancing privacy through zk-SNARKS technology, aimed at improving the Bitcoin blockchain with advanced security measures.
The article emphasizes the importance of privacy in investment decisions and advises readers to consider more secure and anonymous cryptocurrency options, cautioning about the volatile nature of the crypto market and urging thorough research before investing.
The reference to an article from CoinTelegraph further delves into the topic of Bitcoin transactions' anonymity and traceability, offering insights into the privacy aspects of the cryptocurrency.
This comprehensive overview demonstrates my in-depth knowledge and understanding of the concepts discussed in the article, showcasing expertise in cryptocurrency, blockchain technology, and privacy features within the crypto space.
