If you want freedom and sovereignty over your assets, you will really value having total control and privacy over your money and how to use it.
Or maybe you just want to purchase something online without people snooping and knowing what you bought.
These 5 best anonymous cryptocurrency will help you aim towards your motto.
Why not just use Bitcoin?
Bitcoin falls short on this.
It is not an anonymous cryptocurrency, it’s just a pseudonymous one.
Even though with your public address no one really knows who you are because it’s just a long string of integers and characters except for exchange platforms or like proof of a point of purchase where they make you sign up before you can buy bitcoins but even then, all transactions are recorded publicly on the blockchain.
So people can analyze the blockchain and use something called transaction graph analysis to bundle together addresses and transactions to eventually pinpoint them towards a single or a group of entities.
Since it’s peer-to-peer based, so your IP addresses can also be potentially logged by some networks while you’re sending out a transaction.
Suppose you want to send some bitcoins to an address and you broadcast it to the network so those who are listening to the recording they could potentially get your IP address, track your location and find more information about you.
So to maintain freedom and sovereignty over your recordings, you should know about the best anonymous cryptocurrency for privacy.
5 Best Anonymous Cryptocurrency
#1. Monero (XMR)
Monero is secure untraceable electronic cash. It is open-source, decentralized and freely accessible to all.
Monero’s blockchain is intentionally configured to be opaque. It makes transaction details like the identity of the sender and recipients and the amount of every transaction anonymous by disguising the addresses used by participants.
Monero with its untraceable transaction history offers participants a much safer network.
Monero supports a mining process where individuals get rewarded by joining mining pools or they can mine individually. Monero can be mined easily on your traditional computer and does not require any specific mining hardware to do so.
Monero Process in a Nutshell:
Monero uses the crypto node protocol and basically, that mixes the sender’s public key with other keys and it uses stealth addresses one for each transaction so you’re not sending to a public address directly, you’re sending to a self-address that’s created just for this transaction and then the person on the other end can grab it in a way called RingCT that allows only the direct party to see the amounts in a certain transaction.
Monero alleviates privacy concerns by integrating ring signatures, ringCT and stealth addresses.
Ring signatures enable a sending participant to conceal his identity from other participants in a group. Ring signatures are anonymous digital signatures from one member of the group but they don’t reveal which member signed the transaction.
To generate a ring signature, the Monero platform uses a combination of a sender’s account keys and clubs it with public keys on the blockchain which makes it unique as well as private. This enables the ability to hide the identity of the sender as it is computationally impossible to ascertain which of the group member’s key was used to produce the complex signature.
Ring signatures only assured the privacy of the sender. So to increase the privacy of both parties in a transaction, RingCT was implemented to hide the transaction amounts. RingCT prevents privacy leaks by hiding transaction amounts in the blockchain.
Prior to the implementation of RingCT, Monero required transaction amounts to be split into specific denominations. For example, an output of 15 Monero would be broken up into three separate rings in the amounts of 10, 3, and 2.
Monero activated RingCT in January 2017 and a month after its activation, approximately 98% of new transactions were using the RingCT protocol.
Another important aspect of a RingCT transaction is the “range proof“, which prevents senders from committing to negative values in order to secure the supply of Monero.
While an outside observer is unable to see the actual amounts in outputs of a transaction, they are able to confirm that the transaction is a legitimate one.
Stealth addresses enhance the user’s privacy in every transaction. They were mainly implemented to hide the identity of the user receiving the funds.
For every transaction, a new one-time address is generated automatically. The sender transfers the funds to these stealth addresses and the receiver unlocks those funds by using his private key. It then becomes impossible to link the transaction to the recipient.
Only the sender and user can determine each other by implementing stealth addresses eliminating the snooping of any third party.
To sum up, ring signatures protect the identity of the sender, RingCT obfuscates the amount of the transaction and stealth addresses protect the identity of the receiver. That is why Monero (XMR) is the best anonymous cryptocurrency.
Being the best anonymous cryptocurrency, Monero’s non-traceability and privacy features allow it to be used for disreputable purposes and at questionable marketplaces like drugs, gambling markets, and other nefarious purposes on the dark web, etc.
Must See: 15 Best Monero Wallets
#2. Zcash (ZEC)
Why Zcash is the second-best anonymous cryptocurrency? Because Zcash is a decentralized blockchain with proof-of-work on-chain governance.
Zcash uses a lot of Bitcoin’s original open-source code, but with enhanced privacy features. It offers the ability to transact privately on the Zcash blockchain.
Zcash is created by the Electric Coin Company. It’s developing team went to great lengths to ensure the creation of the blockchain was secure and irreproducible so no one else could ever counterfeit Zcash.
The creation of its genesis block was called the ceremony, it was performed similarly to a multi-sig transaction where multiple parties each have a small piece of a key, and only by working together can they unlock the code.
Zcash has evolved from a few developers and has grown into a multi-organizational machine that acts as a stewardess to the code and currency, advocates for an open and inclusive financial system, as well as a charitable foundation.
There are 2 main protagonists in the Z-cash ecosystem:
- The Electric Coin Company, which is made up of developers, scientists, and educators. It is the chief protagonist of the Zcash ecosystem and exists solely to support Zcash’s development and education.
- The Zcash Foundation is a bonafide charitable organization with specific aims at helping create tools sustaining open networks that enable everyone to protect their privacy. The Zcash foundation helps fund research and development, distributes grants to developers, manage the community, and participates in Zcash governance.
Zcash is unique in the sense that it can have both public and private transactions. Public transactions use transparent addresses or T-addresses, and function nearly identically to Bitcoin.
However, if the user wishes to, they can send a private transaction, using a Z-address, otherwise known as shield addresses. Shielded transactions can be verified without disclosing the sender’s or recipient’s balance or even their transaction history.
How does Shield Address work?
Shielded addresses use a cryptographic technology known as the zk-SNARKs.
zk-SNARK stands for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge and it allows one party to validate or prove that a statement is true, without revealing any information aside from the validity of the statement itself.
Also, user needs to have 4GB of RAM to access this feature.
Because of Zcash’s ability to accommodate both public and private transactions, it may open the door for Zcash to gain adoption quickly amongst merchants, financial institutions, and individuals.
#3. PIVX (PIVX)
PIVX stands for Private Instant Verified Transaction. It’s a fork of bitcoin and was launched in January 2016.
It is one of the first privacy coins to implement the proof-of-Stake protocol.
The issue with mineable coins is that their scalability depends on mining with the constant never-ending energy consumption and PIVX with its proof-of-stake protocol puts itself at an advantage over those coins.
The developing team is constantly improving upon their product. They even managed to reduce the transaction time from 5 minutes to 60 seconds.
It has an unlimited coins supply and its total market cap is more than 20 million with a circulating supply of 56+ million PIVX. If all goes smooth, then by the year 2110 there will be more than 300 million PIVX in existence.
PIVX has two transaction fee models:
- $0.001 for normal/public transactions
- $0.01 for Swift/private transactions
It has integrated zerocoin protocol into its private transactions to make them untraceable.
PIVX is a dangerous competitor for every other anonymous cryptocurrency.
NavCoin is the probably the most underrated anonymous cryptocurrency.
It is a community-driven project that was launched back in 2014 so they’re quite established for a cryptocurrency. The team has developed a cryptocurrency that is simple to use and at the same time, it is scalable and private.
NavCoin was built from the Bitcoin core code but there are several changes that were implemented for example they discarded the bitcoins proof-of-work consensus algorithm and moved to proof-of-stake. They even launched a sub-chain called NavTech which enabled the mixing and anonymization of the transactions.
With the movement towards a different consensus method, NavCoin is able to process transactions much more quickly for example NavCoin has a block confirmation time of 20 seconds compared to the ten-minute block time for Bitcoin.
Apart from the speed, NavCoin has also reduced transaction costs and increased scalability.
NavCoin has an opt-in privacy feature this means that transactions are public by default but users can select a mix and encrypt their transaction with the NavTech sub-chain.
NAV is the native coin that is used on the NavCoin ecosystem. It was released without any ICO or pre-mine which should make it more decentralized.
However, the only thing that worries me is that there is a relatively small subset of wallets that seem to control the bulk of the NavCoin supply.
The project is completely run by its community. In fact, NavCoin even has a community fund that is used to pay for project improvement. It’s topped up by 0.5 NAV per block mine which is about half a million NAV per year. NavCoin users can even submit proposals and vote on these initiatives so the network really does what the community decides.
In terms of trading, NAV is listed on a few different exchanges however the bulk of the volume is being done on Binance even then there is not that much turnover on the exchange this implies lower levels of liquidity and hence a chance of slippage with large orders.
#5. Zcoin (XZC)
Zcoin is a privacy-focused anonymous cryptocurrency that allows people to transact anonymously in a unique and scalable way.
Zcoin was built on the zerocoin protocol which was a pretty unique way to approach privacy. Its zerocoin protocol had a number of vulnerabilities and these vulnerabilities allowed an attacker to create forged Zcoins. This happened on two occasions once in 2017 and then again in 2019 which led to over 1% of the circulating supply being forged. That is not an insignificant number.
So the developers decided to come up with an alternative protocol and hence the release of Sigma. Sigma has a number of benefits over zerocoin but perhaps the most important is that it does not have the trusted setup or the fatal flaws. It has been running effectively on the main net and the results appear to be quite positive and satisfying so far.
Zcoin uses a hybrid consensus mechanism. It has a proof-of-work component which means that you can mine it. It uses the MTP algorithm so you can actually still mine Zcoin on a GPU.
However, Zcoin also has a proof-of-stake component which means that you can earn returns by staking your coins.
Useful Zcoin Feature:
The incredible thing about Zcoin is its supportive combination for Tor integration and the dandelion protocol. This adds a further layer of privacy to Zcoin transactions. With this feature, the IP address of the sender is masked from the broader network which means that not only are your transactions private but no one will be able to see that you are even connected to the Zcoin network.
Zcoin also has some high-profile investors behind the project. The most prominent among them has to be Roger Ver who invested in the project in its early stages.
It is getting harder and harder to attain privacy in this modern digital age.
On one side, scammers/hackers are out there to de-anonymize your identity for extortion and on the other side, government agencies and various companies are also out there looking to gain absolute control over you and your assets. And that is precisely why anonymity and privacy are more necessary today than they have ever been before.
All these are the top privacy cryptocurrencies but which one is the best anonymous cryptocurrency according to you? Let me know in the comments.
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