9 Privacy Coins You Need To Know
Since bitcoin went viral, cryptocurrencies have gained popularity because of many different reasons, including privacy and anonymity. However, bitcoin, the world’s novel cryptocurrency, isn’t as anonymous as you’d expect.
While bitcoin transactions don’t display personal information, anyone can easily trace back and find every bitcoin-related activity ever conducted. This is because they’re recorded on bitcoin’s public blockchain that is viewable by anyone.
However, unlike bitcoin, some special cryptocurrencies, known as privacy coins, allow users to gain complete privacy when carrying out blockchain transactions. Assets like Piratechain and Monero use privacy-preserving technology to enforce privacy.
It is estimated that there are over 100 different privacy tokens available for trading on the crypto market as of press time. This article compares some of the best privacy tokens in the market and their standout features.
What is a Privacy Coin?
A privacy token or coin is a cryptocurrency that is fungible and doesn’t reveal transaction information on its blockchain, this allows the coins to be “fungible” in the same way fiat is. They are pretty similar to how your local bank works, where only you and the parties to your transaction can see the details of the said transaction.
In the same vein, these assets make it difficult to figure out and track entities and their related activities. Privacy-preserving assets fall under two categories based on their emphasis.
- Coins that focus on encrypting user transactions so only the owner can decrypt the information.
- Coins that focus on intrackability don’t allow people or nodes to follow transaction trails.
While outside observers won’t have access to this information, the participants within a transaction get to know the parties involved and the amount transacted. Most privacy coins empower receivers and senders to stay anonymous with several levels of privacy, such as hidden transaction balances and wallet addresses.
Differences Between Privacy Tokens
Below we review and highlight some of the hottest privacy assets in the crypto space.
1. Monero ($XMR)
Launched in 2014 as a Bytecoin fork, Monero is currently one of the top cryptocurrencies with over $1B market cap. It is the first altcoin to offer untraceable transactions in the crypto world, and its privacy stems from the CryptoNote protocol, which applies a unique ring signature system.
For every transaction, there is an inclusion of several addresses to make it difficult for anyone to determine the main addresses behind the transaction. Outside observers can’t tell which address is the real sender because Monero offers privacy for all parties in the ring signature.
The transaction amount is confidential because Monero applies encryption so only receivers and senders can know the real amount, thanks to Ring CT tech. At time of writing, $XMR, Monero’s privacy token, has a price of $150.4.
2. PRivaCY Coin ($PRCY)
With PRivaCY, you get a blockchain-based privacy token created to facilitate sustainable funding policies while focusing on security, total privacy, and scalability. Its creators built the PRCY protocol in a completely anonymous staking coin and payment system with a trustless governance structure.
PRivaCY’s privacy coin, $PRCY, is integrated with some of the more advanced but recognizable features that privacy tokens offer, including Bulletproofs, Ring Signatures, Ring CT, Proof of Audit, Stealth transactions, and addresses.
3. Pirate Chain ($ARRR)
Launched by a group of developers from Komodo on 29th August 2018, Pirate Chain is another top privacy token that harnesses the benefits of Delayed Proof of Work (dPoW). It also utilizes Monero’s rule of enforced private-only transactions and zero-knowledge proof (zk-SNARKs) transactions from Zcash.
Pirate Chain claims to be a fully private send cryptocurrency and the first “z transaction-only” chain. It also claims to have created the biggest shielded private pool of funds compared to other privacy coins.
4. Litecash ($CASH)
Litecash ($CASH) is a decentralized, inflation-resistant, community-driven, fair launch built to solve crypto privacy issues. The platform says Litecash was created out of the need to handle the three major drawbacks of cryptocurrency which are fair launch, privacy, and speed.
They operate by the policy “cash is king” making sure Litecash is confidential and free from the interference of banks. To enforce privacy measures, Litecash uses support from the Mimblewimble protocol where every transaction is discrete or hidden.
Mimblewimble is a blockchain protocol that permits privacy-based transaction platforms via a special security framework that is different from popular cryptos like Bitcoin. With Mimblewimble, transactions are not just completely confidential, users won’t need to use wallet addresses. As of the time of writing, a unit of $CASH is priced at $0.000618.
5. Firo ($FIRO)
Firo, previously known as Zcoin, is a privacy-preserving ecosystem and cryptocurrency token. It leverages zero-knowledge proofs, allowing users to destroy tokens and redeem them for new ones at a later date with no transactional history.
The ecosystem provides solid trustless, and on-chain privacy with high anonymity sets. It relies on Dandelion++ technology to provide it with network-layer privacy. Firo also uses a hybrid LLMQ and PoW Chainlocks system to achieve a fair token distribution.
This gives it protection against 51% attacks and a fast finality of transactions and blocks. With Firo’s Elysium tokenization layer, users can create their privacy-enabled tokens with use-cases ranging from voting tokens to stablecoins.
6. Haven Protocol ($XHV)
Haven Protocol considers itself “the world’s only network of private stable assets.” It is based on the Monero codebase. Hence, focusing on untraceable and secure transactions.
It uses a unique “mint and burn” process to offer users untraceable digital assets with real asset-pegged value storage and standard market pricing. In other words, users can burn their $XHV for Haven’s synthetic stablecoin, xUSD.
Haven Protocol works similar to an offshore bank where you can create private tokens representing volatile and stable assets. As of press time, a unit of $XHV, Haven’s base privacy currency, is priced at $0.5269.
7. Alias ($ALIAS)
Purpose-built privacy token, Alias, sees itself as privacy-focused crypto featuring an energy-efficient proof-of-stake algorithm. $ALIAS has a roadmap that prioritizes security, decentralization, and privacy with the help of features like stealth staking, low-power mobile staking, and stealth addresses.
The PoS algorithm allows Alias rapid transaction confirmations, a completely integrated Tor+OBFS4 layer useful in IP obfuscation in the wallet, and ring signatures for anonymity and privacy.
In 2019, the team behind Alias implemented the Alias V hard-fork to activate Stealth staking or Proof-of-Anonymous-Stake (PoAS), making Anonymous staking go live. As of writing time, a unit of $ALIAS is at $0.0299.
The next two coins have become increasingly popular, at the time of writing, they aren’t listed on Polarity.exchange.
8. Secret Token ($SCRT)
The Secret Network is an increasingly popular privacy-oriented blockchain with $SCRT as its native coin. The network allows for data privacy by combining key management and encryption protocols within a Trusted Execution Environment (TEE).
TEE is an isolated hardware within a device used for executing codes while eliminating the risks of vulnerabilities and potential attacks. With TEE, Secret network’s smart contracts — Secret Contract — can compete for privacy-based use cases that most traditional blockchains find hard to accommodate, like private voting mechanisms and concealed asset balances.
$SCRT also serves as the gas token for the services of the Secret Network blockchain, including NFT, Secret DeFi, and a host of others.
Regular transactions on the network are public, such as a transfer of SCRT, but you can wrap it into sSCRT ( shielded ) first and it will function like cash. At time of writing, the token trades at $1.17.
9. Zcash ($ZEC)
Zcash is another privacy token worth keeping an eye out for. It relies on the zk-SNARKS (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) protocol — a zero-knowledge proof method — to obscure confidential and personal data like crypto wallet address and transaction amount.
One factor that makes Zcash stand out is that it provides fully private transactions like other top privacy tokens and provides fully public transactions. Besides, users can make some parts of a transaction private and some public.
In enabling public transactions, Zcash has made itself a more friendly option to regulators than others. It also has the unique option of permitting senders to include private memos in completely shielded transactions.
Conclusion
The degree of anonymity and privacy that cryptocurrencies provide is one of their strongest points. The privacy solutions we have reviewed offer users a convenient way to utilize encryption in their adventure through blockchain. Privacy is something everyone can relate to, if you live in a home or apartment, you have a door with a lock on it, and curtains or drapes to cover your windows. If you use iMessage or Signal your messages are encrypted, the notion that blockchain does not need privacy goes against the nature of day to day life.
