Privacy Coins

Privacy coins can seem shady or mysterious. Privacy coins can be owned by anyone, in any amount and sent to anyone at any time without anyone knowing. Privacy coins are essentially the digital equivalent of cash. Below is a brief description of some of the most popular privacy coins.

Monero

Monero was launched in April 2014. It was a fair, pre-announced launch of the CryptoNote reference code. There was no premine or instamine, and no portion of the block reward goes to development. See the original Bitcointalk thread here. The founder, thankful_for_today, proposed some controversial changes that the community disagreed with. A fallout ensued, and the Monero Core Team forked the project with the community following this new Core Team. This Core Team has provided oversight since.

Monero has made several large improvements since launch. The blockchain was migrated to a different database structure to provide greater efficiency and flexibility, minimum ring signature sizes were set so that all transactions were private by mandate, and RingCT was implemented to hide the transaction amounts. Nearly all improvements have provided improvements to security or privacy, or they have facilitated use. Monero continues to develop with goals of privacy and security first, ease of use and efficiency second.

Security

Users must be able to trust Monero with their transactions, without risk of error or attack. Monero gives the full block reward to the miners, who are the most critical members of the network who provide this security. Transactions are cryptographically secure using the latest and most resilient encryption tools available.

Privacy

Monero takes privacy seriously. Monero needs to be able to protect users in a court of law and, in extreme cases, from the death penalty. This level of privacy must be completely accessible to all users, whether they are technologically competent or have no idea how Monero works. A user needs to confidently trust Monero in a way that this person does not feel pressured into changing their spending habits for risk of others finding out.

Zcash

In addition to cutting-edge, privacy-preserving cryptography, Zcash has unique characteristics that differentiate it from other projects. Zcash supports fast block times (75 seconds), low fees (default 0.0001 ZEC) and large block sizes (2 MB). Zcash has regular upgrade schedules, which means this protocol is adaptable to meet the varied use cases of today, as well as the unforeseen use cases of tomorrow. This promotes innovation and prevents ossification.

There are several approaches to protecting financial privacy. In the realm of digital currencies, we strongly believe that Zcash has the best approach. With a fully-shielded Zcash transaction, the sender, recipient and amount are fully encrypted and completely private. Please note that fully transparent Zcash transactions are similar to BTC in that the sender, receiver and amount are visible on a public blockchain. Shielded transactions help preserve financial privacy by making it more difficult to link transactions.

Other projects, such as Monero, use ring signatures that obscure the sender and recipient. Monero’s use of Bulletproofs hides the transaction amount but not the transaction graph (the latter relies instead on their ring signatures and mixins). Advanced forensics and analytics companies claim to be able to trace these types of transactions. Zcash’s use of Groth 16 proofs hides both the transaction amount and the transaction graph (the latter by proving that the note being spent exists in the global note commitment tree).

Privacy-enhancing technology also must fit within a regulatory framework. Zcash is trusted by regulated exchanges such as Gemini, who recently announced support for shielded withdrawals.

Dash

Verge

Grin

CoinSpeedCost
BTC10 Minutes