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The popularity of cryptocurrencies has grown due to several factors, including privacy and anonymity. Some of them assist users in concealing their identification and transactional information. However, users are looking for alternative solutions as apprehensions about the anonymity of early cryptocurrencies, like Bitcoin, grow.
Privacy being the basis of Defi, all cryptocurrencies are private in the conventional sense. No central body controls cryptocurrencies; hence, the ownership remains private. However, in the context of cryptocurrencies, “private” and “public” relates to the degree of secrecy that a given coin offers.
What is a private cryptocurrency?
A class of cryptocurrencies offering anonymous blockchain transactions is a private cryptocurrency or privacy coin. Some strategies used in trading bitcoin assets include disguising a user’s actual wallet balance and address and combining numerous transactions to avoid chain analysis to hide the source and destination of cryptocurrency transactions.
On the other hand, by enabling anybody to conduct chain analyses and observe public addresses and transactions in their network, non-private blockchains like Bitcoin and others offer transparency. This makes monitoring a person’s bitcoin and other publicly traded cryptocurrencies deposits and withdrawals feasible.
Private cryptocurrencies, however, provide untraceability and anonymity. While untraceability renders it practically impossible for other parties to retrace the trail of transactions using services like blockchain analysis, obscurity obscures the identity behind a transaction.
5 Private Cryptocurrencies List You Should Know About
- Monero (XMR)
Monero provides a high level of transaction and user privacy. While Monero and Bitcoin are both decentralized peer-to-peer cryptocurrencies, Monero is distinguished as being more anonymous or privacy-oriented than Bitcoin. The anonymization attribute of Monero has contributed significantly to its growing popularity in the cryptocurrency community. Every bitcoin user receives a public address, also known as a key, that is specific to them.
Even though the sender is aware of the recipient’s public address, using Monero does not grant access to a window view of the recipient’s holdings. Transactions made with Monero cannot be linked to or tracked. Coins sent to a recipient are redirected through a unique address created at random for the transaction. Check the prices of Monero in the USDT market here.
- Zcash (ZEC)
Zcash is another private crypto available in India. When a group of researchers decided they wanted to develop a cryptocurrency comparable to Bitcoin, but with some extra features, ZCash was born in 2016. They created a Bitcoin blockchain split that has improved user security and anonymity. Zerocash, which the scientists initially created as Zerocoin, was introduced not long after. The cryptocurrency was eventually called ZCash.
ZCash does not remove information about transactions. Instead, it encrypts it to prevent tracking. The security protocol zk-SNARK increases user security and anonymity while keeping the ZCash blockchain encrypted.
- Dash (DASH)
Dash, introduced in 2014, was formerly known as Xcoin. It was initially built with the intention of protecting user anonymity and privacy. The company has now recast its goals, albeit it still includes robust encryption capabilities. With the ability to be used as cash, a credit card, or through PayPal, Dash now wants to be a tool for everyday transactions. An open-source project called Dash has a decentralized payment network built-in.
“Masternodes,” a subset of Dash’s users, is in charge of running the network. The validation and verification of transactions are made more accessible by master nodes. Each master node has a beginning stake in their respective systems equal to 1,000 DASH. Additionally, it addresses the issue of transactions’ scalability. This is because the quantity of nodes needed to authorize a transaction is decreased to a tolerable level. Masternodes are in charge of authorizing transactions from the miner network and providing the Dash network services like payment and privacy. You can look into the prices of Dash here.
- Verge (XVG)
The open-source, decentralized cryptocurrency Verge (XVG) boasts that it offers anonymous transactions by masking the participants’ IP addresses and locations. Verge trades under the XVG ticker.
By masking users’ IP addresses, Verge strongly emphasizes anonymity. An IP address is a numeric identifier connected to a particular computer or computer network. Obfuscating IP addresses renders transactions entirely untraceable; using an IP address, it is possible to track the user and the online activities they carried out on the connected device.
The entire anonymity of participants is difficult to protect with several well-known cryptocurrencies. As a result, private ledgers that provide distinctive ways to conceal users’ identities are becoming increasingly popular due to cryptocurrencies like Verge.
- Beam (BEAM)
Beam is a privacy coin that seeks to explore confidential DeFi. It uses the Mimblewimble protocol, which hides transaction values and metadata while thinning out the blockchain and enhancing scalability. LelantusMW’s most recent development seeks to deliver privacy and anonymity on all fronts. The goal of Beam is to give people total control over their finances. The team is creating a new blockchain to offer a secure, decentralized, and practical means of value storage and exchange and a robust self-governing community to foster its growth and support. To purchase beam and go through the prices, click here.
Bottom Line
In the virtual world, anonymity is highly desired, but it also carries the risk of consequential criminal activity. Operators of cryptocurrencies like exchanges need to devise a system to prevent frequent efforts at hacking by malicious parties and mandate KYC to ensure smooth law enforcement if required. The regulators have voiced serious concerns over Privacy Coins. Infrastructure is needed in the industry to confirm the legitimate owner of cryptographic assets.
Frequently Asked Questions
Is Cryptocurrency Legal In India?
In India, cryptocurrencies are legal; anyone can purchase, sell, and trade cryptocurrencies. They are currently unregulated; India does not have a regulatory framework in place to regulate its functioning. According to the Ministry of Corporate Affairs (MCA), companies must now declare their crypto trading/investments during the financial year, according to the Ministry of Corporate Affairs (MCA). Cryptocurrency transactions have been taxable in India when people receiving such gains are Indian tax residents or where the crypto is considered to be domiciled in India
What Is The Meaning Of Crypto?
A cryptocurrency is a digital currency that is secured by the process of cryptography, making counterfeiting and double-spending almost impossible to happen. Blockchain technology is used to produce cryptocurrencies ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a centralized authority does not issue them.
Is Ethereum Safe To Invest?
The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.
What Is The Safest Cryptocurrency To Invest In?
Bitcoin has had the highest market capitalization, has been around the longest, has the most experienced development team, and has enormous network impact and brand recognition. As a result, while trading cryptocurrencies, the rate of return on Bitcoin is commonly used as a benchmark. However, the risks associated with cryptocurrencies remain, and the safest cryptocurrency for you depends on your analysis.
Is Bitcoin And Cryptocurrency The Same Thing?
Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.
How To Invest In Cryptocurrency In India?
There are two ways of investing in cryptocurrency, mining and via exchanges. Cryptocurrency mining is the process of verifying and adding transactions between users to the blockchain public ledger. Purchasing cryptocurrency in India is a straightforward procedure where investors simply participate by registering with a crypto exchange such as WazirX. After registering for an account, citizens can trade multiple cryptocurrencies, store cryptocurrency in wallets, and more.
Can I Invest In Cryptocurrency?
Yes, with exchanges like WazirX, you may invest in cryptocurrency in India. To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process.
Is Mining Cryptocurrency Legal?
Cryptocurrency mining can be time-consuming, expensive, and sporadically profitable. Mining has an appeal for many cryptocurrency enthusiasts as miners are paid directly with crypto tokens for their efforts. The legality of cryptocurrency mining is dependent on where you live. In India, there is no restriction on crypto mining.
What Are The Best Cryptocurrencies To Invest In?
The best cryptocurrencies to invest in would be the ones you study and analyze in detail. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, and many altcoins such as Tron, Ripple, Litecoin, etc.
What Is Crypto?
Crypto or a cryptocurrency is a digital currency protected by cryptography, making counterfeiting and double-spending nearly impossible. Blockchain technology is used to produce cryptocurrencies (a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a government does not issue them. The word "cryptocurrency" refers to the encryption methods employed to keep digital currencies and the network secure.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
