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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
Who Invented Cryptocurrency?
Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.
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.
Is crypto legal?
Crypto is legal in most countries, including India. While nations like the U.S. and many in Europe have regulatory frameworks, others like China have strict bans.
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.
How Cryptocurrency Works?
Cryptocurrencies use cryptography technology to keep transactions and their units (tokens) secure. Cryptocurrency works via a technology called the blockchain. A blockchain is a decentralized technology that handles and records transactions across numerous computers. The security of this technology is part of its value.
Are Cryptocurrencies A Good Investment?
Cryptocurrency has the potential to make you extremely wealthy, and the potential to cause you to lose your money. Crypto assets, like any other investment, come with many risks and potential rewards. Fundamentally, cryptocurrency is an excellent investment, particularly if you want to gain direct exposure to the demand for digital currency.
How Safe Are Cryptocurrencies?
Cryptocurrencies can be safe, but your crypto wallets can be hacked if proper security steps are not performed. There are also dangers and uncertainties associated with investments, and we cannot declare any virtual currency investment risk-free. Buying and selling cryptocurrencies does not have to be dangerous if the trader is well-versed in the market and treats his coins with care.
How To Invest In Cryptocurrency Stocks?
Cryptocurrency can be purchased in two ways: through mining or exchanges. The process of confirming and adding transactions to the blockchain public ledger is known as cryptocurrency mining. Cryptocurrency exchanges are another option. Exchanges make money by charging transaction fees, but there are alternative platforms where you may communicate directly with other cryptocurrency traders.
Is Cryptocurrency Safe To Invest In?
Cryptocurrency investments are subject to market risks, but if sufficient security measures are not taken, trading accounts can be maliciously accessed. Investments come with risks and uncertainties, and we cannot claim that any digital currency investment is risk-free. Buying and selling cryptocurrencies can be risky even if the trader is knowledgeable about the market and treats their coins carefully.
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.
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.
