One of the most significant cryptocurrency talking points is anonymity. How anonymous does using a cryptocurrency make you? The answer lies in the tokens you use. Not all cryptocurrencies are equal, and some give more credence to privacy and anonymity than others.
Here are some of the most private cryptocurrencies you can use today.
1. Monero (XMR)
The first privacy orientated cryptocurrency for you to consider is Monero.
Monero uses several different techniques that drastically increase privacy. For instance, unlike most other Bitcoin-derivative cryptocurrencies, Monero uses the CryptoNight proof-of-work algorithm. Within that, Monero uses ring signatures, stealth addresses, and Ring Confidential Transactions to ensure that no one observing the Monero blockchain can discern where you send tokens or how much is resting in a single address.
The emphasis Monero puts on privacy, anonymity, and security means all manner of individuals use it, for all sorts of online activities. Monero is widely used on darknet markets, as the payment method for ransomware attacks, and as an easily minable but untraceable token in cryptojacking schemes.
Regardless, Monero remains one of the single-most private cryptocurrencies you can use. Check out Dan’s Monero Coin Study for more information.
2. Verge (XVG)
Most private cryptocurrencies rely on cryptographic techniques to secure the privacy of the user. Verge differs from the crowd in that it uses Tor and I2P to protect your identity.
“Verge uses multiple anonymity-centric networks such as TOR and I2P. The IP addresses of the users are fully obfuscated. The Core QT wallet has built-in TOR integration as well as SSL encryption which adds an extra level of security.”
Tor sends your communication across a distributed network of nodes and relays run by a global team of volunteers. I2P encrypts your data before sending it through an anonymous peer-to-peer distributed global network. Verge uses these technologies together to ensure that no one knows where a transaction originates.
To clarify, Verge does use an open ledger to verify transactions. However, there is no link between the transaction record to any IP addresses or other identifying information.
3. ZCash (ZEC)
ZCash uses something called “Zero-Knowledge Proofs” to protect your privacy, also referred to the zk-SNARK protocol. zk-SNARK stands for “zero-knowledge succinct non-interactive argument of knowledge.”
Zero-knowledge proofs, in this context, are a cryptographic technique that allows two users to transact without ever revealing their true identity or address. The ZCash blockchain doesn’t record send and receive addresses. Instead, ZCash shields those final addresses to obscure the genesis of any payments.
Also, ZCash uses an encrypted open ledger. While the blockchain ledger is open, only parties with the correct encryption key can view a given transaction. If only you and your recipient have keys to your transaction, then it remains out of view, protecting your privacy.
ZCash allows for “transparent transactions.” You can send a ZCash transparent transaction to wallets or exchanges that don’t support the privacy features of ZCash without exposing your identity.
4. Komodo (KMD)
Komodo is a hard fork of ZCash and the zk-SNARK protocol. As such, Komodo shares many similarities to the privacy-focused cryptocurrency, including zero-knowledge proofs.
However, Komodo has steadily built upon the ZCash foundation, making privacy-focused improvements such as purchasing new currencies via the Komodo blockchain and decentralized exchange while remaining anonymous, or severing the link between your coins and transactions before moving them on.
The Komodo platform is also one of the most innovative around, implementing and developing atomic swap technology, developing their BarterDEX decentralized exchange, as well as providing a dApp platform.
5. PIVX (PIVX)
PIVX stands for Private Instant Verified Transaction. It is another privacy-focused cryptocurrency that uses some features of zk-SNARKs (like ZCash and Komodo), albeit via the Zerocoin protocol developed by Prof. Matthew D. Green of John Hopkins University (in conjunction with graduate students Ian Miers and Christina Garman).
PIVX uses a decentralized and optionally anonymous proof of stake algorithm that lets you participate in the network while remaining private. (What is a proof of stake algorithm, anyway?) Also, the use of the Zerocoin protocol means users can stake their tokens anonymous, but also receive their stake-dividend anonymously. The PIVX wallet runs over Tor, for both staking and masternodes, further enhancing your privacy.
Another massive plus for the PIVX network is transaction speed. Aside from the outstanding security and privacy features, PIVX transactions rank amongst the fastest in the crypto-world. Another thing I like is that PIVX is eco-friendly, consuming a ridiculously small amount of energy compared to its direct competitors and especially Bitcoin.
6. Bitcoin Private (BTCP)
Like Bitcoin, but with privacy enhancements. Sounds good, right?
In many ways, BTCP is the cryptocurrency many wish Bitcoin was. BTCP has an interesting origin story, too. Unique to the crypto-world, Bitcoin Private is the result of a “fork-merge” that saw a main Bitcoin blockchain fork instantly merge with privacy-orientated ZClassic (ZCL). ZClassic is itself a fork of ZCash, so the new cryptocurrency retains many of the same privacy features including the zk-SNARK protocol.
BTCP also increase the blocksize to enable a slightly faster network than standard Bitcoin.
What Is the Most Private Cryptocurrency?
For ease of use and ease of access, Monero still takes the privacy cryptocurrency crown. Other privacy-focused cryptocurrencies, like PIVX and Komodo, are making strong claims to that crown. It may make sense for you to use multiple cryptocurrencies that focus on privacy, rather than putting all of your privacy-crypto eggs in a single basket.
One of the best ways to get ahead of the curve with privacy-focused cryptocurrencies is by checking out ICOs before they hit the market. Here are the best ICO tracking sites for new and upcoming ICOs for you to consider!