What is a Private Coin and Are they the Future?

Private coins - finwatchers.com
Bitcoin is not considered fully private. Many beginners believe Bitcoin transactions are anonymous, however, that is not the truth.

Anyone with technical knowledge of Bitcoin and its working, can easily track the transactions. Bitcoin cannot protect the information of all the transactions.


Private coins are cryptocurrencies that allow their users to maintain the complete anonymity of their bitcoin transactions.


Such coins empower their users' utmost privacy by hiding their transaction balance and wallet addresses.


Private coins have two contrasting features: anonymity and untraceability. These make it impossible for third parties or the community within, to access any kind of transaction or user information through any means.


However, there are often crises related to the legality of private coins. There is no simple answer to it as it depends on the jurisdiction of states.


For instance, to eliminate potential money laundering, South Korea has banned the use of privacy coins.


A lot of countries, if not allow cryptocurrencies, also do not restrict the use of privacy coins, maintaining a gray area.


Many countries, however, taking a different route, are developing technology that traces untraceable transactions. 


However, the large transactions of private coins raise concerns about the hidden identity of owners and are likely to be investigated by regulators.

Top Private Coins

• Dash

Also, the cryptocurrency Dash offers anonymity to its users. Dash was initially started as a fork to Bitcoin and was named XCoin. 


Dash uses the CoinJoin strategy to cloak the transaction details of their customers. It leverages features such as PrivateSend, which transfers the power of keeping their transactions hidden to users.

• ZCash

Considered the best private cryptocurrency out there, ZCash licenses its users the option to keep their transactions private.


It uses zk-SNARKs strategy for keeping the transactions private. Z-Cash also uses Zero-Strategy Proof, a cryptography tool.


Zcash shares the same history as Dash and was founded as a fork of Bitcoin in 2016. 

• Monero

Monero is the most popular Private Coin out there. Compared to other private coins, transactions in Monero are harder to crack due to the strategies behind them.


Monero uses Stealth Addresses and Ring Signatures strategies to mask the identity of its users.


However, unlike ZCash and Dash, privacy is not an option, all the transactions done on Monero are private. 

Future of Private Coins:

In today’s age, we all are quite addicted to social media platforms such as Instagram, Facebook, and Whatsapp and use them for various purposes. However, our data is not safe with them. They have previously sold it to government organizations and both the groups involved in it have gained from our data without giving us a penny.


The untraceable nature of cryptocurrency infuses controversies regarding criminal activities. However, statistics show only a percent of crypto had been found to be involved in such activities. 


Nonetheless, private coins render individuals privacy and ownership of their money.


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Disclaimer:
This information is for educational purposes only and does not constitute investment advice. No person should rely on it to make any investment. Investing carries risks, including the loss of capital. All opinions expressed are subject to change without notice. Past performance is not indicative of future results. Always seek the advice of a licensed investment professional before making any investment.