The Best Privacy Coins: The Ultimate Guide (2022)

The Best Privacy Coins: The Ultimate Guide

The Best Privacy Coins: The Ultimate Guide

Blockchains are decentralized networks that are able to achieve a high degree of autonomy, transparency, and privacy. By utilizing a blockchain network, a network participant is able to transact at high speeds and cheap fees with other participants in the network regardless of their geographic location. Up until now, it was believed that all blockchain networks had a high level of privacy, but this was proven to be false. The weaknesses in legacy blockchains demonstrated that it was easier to link a real-world identity with an account on the blockchain as originally believed. This led to the creation of privacy-focused blockchains that prioritize the concealment of user identity on their networks. In this article, we will take a look at some of these privacy-focused blockchains that have the highest levels of user privacy.

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Why is Privacy in Blockchains Important?

Before we proceed to take a look at the top 10 private privacy-focused crypto projects, it’s important to understand why privacy in a blockchain network is important. Since the base premise of blockchain networks is to enable a decentralized and autonomous framework for anyone to transact with, it is important that their real-world identities can’t be linked to accounts on the blockchain. The main reason for this is that most blockchains are transparent in nature, meaning that anyone can view accounts and their balances. With this being the case, it is vital that lengthy blockchain wallets that consist of letters and numbers can’t be linked to a person. Otherwise, a person could be put at risk of becoming a target for hackers and cybercriminals.

Now, there are developer teams in the blockchain space that feel that blockchains must not be as transparent as legacy networks such as Bitcoin and Ethereum currently are. These teams prefer that not just only are the identities linked to the accounts kept private, but also that account balances and transaction activity remain private too.

Top 10 Best Privacy Cryptocurrencies

Beam (BEAM)

There are a lot of technical terms used by developer teams in the blockchain space that may sound weird to the casual investor or ordinary person. Beam is a great example of this, stating that they use MimbleWimble and LelantusMW protocols which offer people in the confidential and decentralized DeFi space a high level of anonymity. The primary focus of Beam is security, as the privacy around transactions is guaranteed by default, and addresses are not stored on the blockchain. Even though Beam uses the same Unspent Transaction Output model as Bitcoin, values in Beam’s network are encrypted by so-called “binding factors”, adding an extra level of security.


Grin (GRIN)

Grin implements the same MimbleWimble technology as Beam, and it also focuses on maintaining the privacy of the network’s users and transactions. To ensure privacy in the network, Grin does not make use of amounts or addresses. To hide the origins of transactions, the transactions first travel among a subset of peers in the network before the transaction is broadcasted. In other words, all transactions appear randomized to outsiders looking in at the data. Grin removes prior transaction data by leveraging the cryptography of the MimbleWimble protocol. According to the creators of the project, leveraging MimbleWimble prevents Grin from collapsing under the weight of too much data kept on its chain. In simple terms, the Grin network is compact, easy to download and verify, and is completely anonymous thanks to the removal of certain transaction information.


Verge Currency (XVG)

Created in 2014 under the name of DogeCoinDark, the goal of Verge is to improve upon the original Bitcoin blockchain. One of the main ways that Verge achieves this is through its integration with TOR, also known as The Orion Router. TOR is an IP obfuscation service that helps Verge keep transactions on its network secure. According to the project’s creators, Verge is one of the few cryptocurrencies in the market to have multi-algorithm support, using the Proof of Work consensus mechanism. For the more technically inclined, Verge has five different hash functions and they are Scrypt, X17, Lyra2rev2, myr-groestl and blake2s.


Monero (XMR)

Monero is also a private digital currency that allows users to act as their own bank. The Monero security protocols ensure that outsiders cannot link or view users’ balances and transaction activity. This is one of the major contrasts of Monero when compared to other well-known coins such as Ethereum and Bitcoin, which have transparent blockchains. According to the creators, Monero is the only cryptocurrency where every user is anonymous by default. Also, the amount in every transaction and the identities of the senders and receivers is hidden through the implementation of Ring Signatures, RingCT, and Stealth Addresses. Since every transaction is private, Monero cannot be traced.


Horizon (ZEN)

Zen is the native cryptocurrency of Horizen, which makes use of Zensoo technology to enable developers and businesses to create their own public or private blockchains. Zen implements two consensus mechanisms: Proof of Work and Equihash. The cryptocurrency offers users Z-addresses and T-addresses. Z-addresses are completely private and anonymous, offering users the opportunity to create what is known as shielded transactions. On the other hand, T-addresses are public and transparent and can be used for the creation of transactions that are similar to those on the Bitcoin blockchain. Users have the flexibility to choose which type of address they prefer depending on their privacy requirements.


DASH (DASH)

DASH is a payment cryptocurrency that is meant to have nearly immediate transaction times and is a fork of the Bitcoin protocol. The only difference is that DASH has additional privacy features with negligible transaction fees. The network is also a two-tier blockchain network that includes both miners and masternodes. By including masternodes in the network, the blockchain is able to implement PrivateSend and InstantSend, which provide both untraceable and anonymous transactions. Created in 2014, DASH is the first private cryptocurrency.


ZCash (ZEC)

If you’re a fan of Edward Snowden when it comes to privacy, then you might want to take a look at ZCash. The infamous whistleblower came out in support of ZCash in 2017 and stated that it was “the most interesting alternative” to Bitcoin. Similar to other privacy-focused coins, ZCash offers users two types of transactions that can either be shielded or transparent. ZCash offers enhanced privacy using a protocol called ZK-Snarks, which is an acronym for “zero-knowledge succinct non-interactive arguments of knowledge”. Although the process that ZCash uses is relatively complex, the average user only needs to focus on the fact that ZCash tries to improve on the Bitcoin blockchain with enhanced security measures. Other benefits of transacting on the ZCash blockchain include fast block formation times, low fees, and large block sizes.


ByteCoin (BCN)

According to ByteCoin’s website, the team claims to be the “first private untraceable cryptocurrency”. The coin is powered by CryptoNote Technology, which enables untraceable payments, unlinkable transactions, and a scalable blockchain. The ByteCoin blockchain obscures all addresses, as well as uses Ring signatures to blend different outputs into one transaction. This enhances security, making it nearly impossible to decrypt the source of the money. Bytecoin also allows users to generate one-time addresses from a single set of keys. This makes transactions and addresses unlinkable.


Firo (FIRO)

Firo, formerly known as ZCoin, implements Dandelion Technology to shuffle user IP addresses between nodes in a random number of steps. In doing so, user anonymity on the network is assured. Users can also burn their coins in an anonymity set of over 65,000, which receivers can then redeem coins thanks to Firo’s implementation of Lelantus technology. This breaks the link between coin owners and any transactions that were attached to the person’s coins - ensuring a high level of privacy. Once again, this is in contrast to how transactions work in transparent networks such as Bitcoin, which have public blockchains and previous transaction histories.


Super Zero Protocol (SERO)

SERO claims that it is “the world’s first truly privacy transaction platform for decentralized applications”, and is also the world’s first platform that allows anonymous digital assets issuance. This means that developers are able to develop and issue their own privacy coins that can then be used in dApps. Cryptocurrency and blockchain developers and enthusiasts will appreciate the fact that SERO has built the world’s first Zero-Knowledge Proof encryption library, known as “Super ZK”. Super ZK is twenty times faster than the latest and popular privacy protocol, ZK-Snarks.

The Best Privacy Coins: Conclusion

Blockchain networks may not provide users with the anonymity that they believe they do. Although the process is long and slightly difficult, it is not impossible to link accounts on the blockchain with real-world identities. This has been proven by organizations, computer scientists, and blockchain experts. It is for this reason that teams in the blockchain space began creating what is known as privacy cryptocurrencies, or privacy blockchains. These blockchains prioritize the privacy and anonymity of users transacting on them. There are multiple approaches used when creating privacy-focused blockchain networks, and each may have varying levels of anonymity and privacy. Some projects also offer users the ability to pick whether to create a private transaction that cannot be viewed on the blockchain or to create a transparent transaction that can be viewed by outsiders but the identity belonging to the account can’t be linked.

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About Dalton Rush

Dalton Rush has always been aware of a centuries-old cult's intent to control the majority through centrally controlled global organizations by deceiving the public into accepting their system with the help of multiple made-up crises. This is why he developed a passion for self-education, self-expression, freedom, privacy, and independence, all of which led to the creation of RushRadar.

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