7 Anonymous Cryptocurrencies You Should Know About
What if we told you that Bitcoin, which was regarded as a very secretive currency in its initial days of inception, is not actually an anonymous currency but a pseudonymous one? The fact that Bitcoin is not an anonymous currency could dampen the fungibility of a currency concept. However, you would be surprised to know that the developers of Bitcoin do not see this as an alarming issue because they are not entangled with the currency’s concerns about scalability. Thanks to this, multiple alternate currency systems to that of Bitcoin are popping up every now and then to restore the fungibility of anonymous currencies.
As a compilation, we have brought together some cryptocurrencies that are trying to restore the anonymity of currencies. Check them out.
Hands down, Monero is one of the best cryptocurrencies with respect to privacy. On a scale of one to ten, Monero would get rated 11 mainly because of the fact that you cannot trace the amount that has been transacted using Monero. It was anonymous to an extent that the law enforcement could not actually determine the worth of Monero at that time of its shutdown.
In order to eclipse the privacy of users, Monero deploys a number of technologies such as Kovri, Ring Signatures, Stealth Addresses and more. One of the shortcomings with Monero is that it is close to 50 times the size of a Bitcoin considering its complex cryptography.
For the uninitiated, PIVX is one of the first cryptocurrencies to use the Zercoin protocol. This implementation gives PIVX and invariable edge with respect to privacy and anonymity of the currency when compared to the others in the market. This implementation has been relatively recent and is experiencing major hurdles. However, the development team behind the cryptocurrency is doing a great job in fixing stuff.
Komodo is one of those great things in life you come across of late. Call it an underdog or a dark horse in the cryptosphere, it is a cryptocurrency that implements zk-SNARK protocol. This protocol is otherwise known as zero-knowledge proofs, which is further inherited from what is called Zcash. Since Komodo is more focused on decentralized exchanges, cross-chain atomic swaps and more, it is majorly used for private transactions.
Zcash works on the zero-knowledge proofs protocol, which makes it anonymous in the cryptocurrency market. However, this protocol is not enabled by default in the system, making it very much similar to the functionality of Bitcoins with an open ledger or Blockchain technology. One of the major concerns plaguing Zcash is that the enablement of the privacy option would require a user to have a system with a minimum of 4 GB of RAM. Though research to fix the shortcoming is going steady and fast, we can expect the cryptocurrency to create an impact anytime soon.
Like we mentioned, this works on the Zerocoin protocol. However, when Zcoin was set up, the system used a trusted setup approach. This means that a trusted group of individuals are relied on to establish the initial parameters required for the launch of the cryptocurrency. In turn, if the trusted group of individuals are influenced and become corrupt, minting money would become a child’s play. The works to remove the trusted setup approach is on the cards and when removed, Zcoin could be one of the most anonymous cryptocurrencies out there.
Like Zcash and Zcoin, ZenCash again works on the Zerocoin protocol. It also mandates a minimum system requirement for operations, which is close to 3.2GB of RAM today and a processor with a 64-bit operating system. However, the developers are trying to differentiate ZenCash from the rest by improving the usability of the cryptocurrency through the use of distinct wallets. These wallets are consistently looked for smooth functioning and anonymity is maintained with the help of secured nodes.
One of the most popular cryptocurrencies of 2017, Dash is, unfortunately, not as private and anonymous as its market counterparts. DASH works on a concept called PrivateSend, which at its fundamental levels is a class of coin-mixing technique executed by the involved master nodes. This privacy technique makes use of a metadata that could be analyzed and assessed to uncover details about senders and receivers. Another factor to consider is that the team behind DASH has quite publically implemented the AML/KYC compliance of the cryptocurrency’s Blockchain. If this means anything to anonymity, it means the opposite of it.
With that said, these are just opinions and point of views from the perspective of anonymity of currencies. You might agree to these or not and this is entirely subjective. But before we kick-start a debate and analyze the technicalities and functioning of these cryptocurrencies, let us take a moment to understand that each brand is trying its best to fight their shortcomings and make transactions more secure and private. All we can do for now is keep an eye on these cryptocurrencies and track the evolution of them in terms of privacy features.