Cryptocurrencies have gained popularity due to several factors, including privacy and anonymity. Some of them help users to conceal their identities and their transactions. Amid mounting concerns about the anonymity of early cryptocurrencies, such as Bitcoin, users are searching for new options.
Let’s take a look at the top privacy-oriented cryptocurrencies, which have several built-in privacy features. They claim to offer enhanced security features that help to keep users' identities and activities concealed.
Monero (XMR) stands at the top of the list. This cryptocurrency's popularity has been on the rise, primarily due to its ability to help anonymize users. Monero transactions are much more difficult to trace because they use ring signatures and stealth addresses. These methods help to hide the identities of the sender and the receiver. Additionally, Ring Confidential Transactions, or RingCT, helps to conceal the transaction amount, providing more privacy.
Trading at $85.18 as of September 10, 2020, Monero was the eighteenth-largest cryptocurrency with a market cap of $1.5 billion.
Zcash (ZEC) defines itself as “If Bitcoin is like http for money, Zcash is https," underlining its enhanced security and privacy features. Zcash has implemented a cryptographic tool called Zero-Knowledge Proof and grants participants an option to shield transactions. It allows participants to transact without any of them revealing their addresses to the other(s). Zero-Knowledge Proof also obfuscates the transaction amount.
Zcash ranks at number 30 in the list of cryptocurrencies with a market cap of $608 million, trading at $60.7778 as of September 10, 2020.
Created in 2014, Dash is a cryptocurrency that allows the user to choose whether or not their transactions are anonymous and private using its PrivateSend feature. This allows users who would like to remain within their countries' regulatory standards to do so. The feature works by obscuring the origins of your funds. Choosing to use the private send feature will slightly raise the fee for the transaction.
As of September 10, 2020, Dash ranked 28th by market cap with a total value of over $741 million. At the time of writing, it is trading at $76.47.
Instead of relying on cryptographic techniques, Verge (XVG) banks on the existing and tested technology of The Onion Router (TOR) and the Invisible Internet Project (I2P) to protect users' identities. TOR bounces a user's communications over a distributed network of relays and tunnels run by volunteers spread across the globe, thereby hiding the user’s identity. On the other hand, I2P encrypts user data before sending it through an anonymous, peer-to-peer, and volunteer-run globally distributed network. It allows hiding the locations and IP addresses of the transacting participants.
Verge made headlines when a popular adult website adopted it to start accepting cryptocurrency payments. The primary reason for the development was Verge’s privacy features.
As of September 10, 2020, Verge ranked 119th by market cap with a total value of $81.2 million and an exchange rate of .004967 cents.
Horizen (ZEN) offers privacy shielded Z-Addresses and public T-Addresses that work similarly to Bitcoin. However, sending funds from a Z-Address to a T-Address will show the amount received. Horizen also boasts a vast node network, which helps to improve anonymity.
On September 10, 2020, Horizen traded at $6.34 and had a total market cap of around $62.8 million. That made it the 134th largest cryptocurrency.
The Bottom Line
While privacy is a much-desired feature in the virtual world, it brings with it the perils of a large criminal element. Cryptocurrency operators have to fend off numerous hacking attempts by malicious participants. Law enforcement agencies and regulators are also more likely to investigate people with large transactions. Though Bitcoin remains the most popular choice, it is constantly being targeted by government agencies. They have become quite good at tracing Bitcoin transactions, creating a strong incentive to switch to more private cryptocurrencies.
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