Cryptocurrencies help users make anonymous payments by using a decentralized payment system. The control over the cryptocurrency is usually not in the hands of a group of individuals, making for a truly decentralized system that is maintained by the users.
The creation of such payment systems happened because governments all over the world are trying their utmost to spy on their citizens. They keep a close eye on everything you do on the internet. This obviously includes what transactions you make online, providing them with all your personal details and transactions.
So, if you want to keep your transactions private, you should know the best cryptocurrencies that can help you with that.
The need for Newer and More Privacy Oriented Cryptocurrencies
People might not know a lot about cryptocurrencies, but when they hear the word, they think about Bitcoin. Bitcoin is the most popular cryptocurrency on the planet because it is the pioneer of all cryptocurrencies. It is the largest cryptocurrency and enjoys the support of a large customer base. However, there are some issues regarding the user’s privacy when it comes to using Bitcoin.
People think Bitcoin is an anonymous payment service and keeps things private, but in reality, it can reveal more about your account than any traditional bank. All Bitcoin transactions are permanently stored in the public blockchain ledger. Each transaction has a Bitcoin address associated with it.
People use wallets to generate Bitcoin addresses for their transactions, and revealing your identity is necessary for the transaction. Therefore, it’s not really a privacy respecting way. The only way to achieve privacy is to use a new address for each transaction.
This drawback gives rise to a need for better cryptocurrencies. Many have tried and failed, but some are doing well.
Top 5 Privacy Orientated Crypto Coins Picks
Monero is a popular alternative for Bitcoin among cryptocurrency users. It is an established cryptocurrency that focuses on improving the user’s anonymity rather than privacy. In the end, it helps you, since there’s no way to trace the transaction to you, even if one can see how much the transaction is worth and other trivial details.
Ever since it implemented Confidential Transactions feature in January, 2017, Monero’s stock value has risen. This feature hides almost all digits relating to the amount of any transaction. There are certain limitations as to how much it hides, but it provides reasonable privacy.
Moreover, Monero uses Ring Confidential Transactions, which gives a further boost to security and privacy. It creates a mixer by bundling the sending and receiving of public keys with transactions from the past to successfully blur the Bitcoin address involved. Ring Signature and Stealth Addresses are also used to hide the identity of both parties in a transaction, making for a truly anonymous service.
Dash is a good service when it comes to anonymity. It uses the PrivateSend feature that makes things more private. With the addition of a decentralizing and chaining approach, the privacy factor of the PrivateSend feature is improved by Dash. The currency is replaceable, which is something most cryptocurrencies, including Bitcoin, don’t have at the moment.
Any transaction requires at least three people to partake in a transaction. You use different denominations of 0.1Dash, 1 Dash, 10 Dash, and 100 Dash, like paper money. You request a specially configured node, called master node, to mix a certain denomination. When it finds a similar request from another user, it will mix the denominations and request you to pay the amount to yourself. When you repeat the process several times with each denomination, your funds are mixed with those of others, providing your transactions a much greater anonymity.
PIVX is a relatively new cryptocurrency that uses master nodes like Dash and helps you make instant transactions using SwiftTX implementation. It is currently the fourth largest privacy oriented cryptocurrency based on the market cap as of now. The difference between PIVX and Dash is that while Dash requires users to have 1,000 coins in order to run a master node, PIVX requires them to have 10,000 coins.
Zcash is a good cryptocurrency when it comes to privacy and anonymity. It uses a zero-knowledge proof that requires the miners to verify the transaction as well as provide privacy. Privacy is ensured by encrypting the sender’s and receiver’s addresses, as well as the amount of transaction.
While this is a good practice and works pretty fast, it is possible for someone to use public transactions in the blockchain to correlate information.
Verge is a new player in the cryptocurrency market, but it is doing stellar work to enhance the privacy and anonymity of users. It uses I2P and Tor to obfuscate the traffic that flows. This makes it difficult for anyone to see the activity of any user. It gets difficult to see who is sending funds to whom, and how much funds are involved in a transaction.
Verge is on par with or even better than Zcash and Dash when it comes to privacy and anonymity. The only caveat is that it is quite new and is in the wee hours of its development. So, it remains to be seen how it fairs in the future.
Cryptocurrencies help users make payments through a decentralized system. While there are many cryptocurrencies, not all of them provide privacy and anonymity to users. Bitcoin, the most popular cryptocurrency, can be dangerously transparent if the user does not take adequate measures.
There are many cryptocurrencies which are trying to oust Bitcoin’s superiority by providing users with better anonymity and privacy. They use unique features and techniques to help users remain hidden from the government’s eyes.
Bitcoin still enjoys the lion’s share of the customer base in the cryptocurrency market, but if these newer cryptocurrencies continue striving hard to provide a better service, the tables could turn pretty easily.
For those who want to hide their transactions, it is important that you learn about such cryptocurrencies and start investing in them.