In the 21st century, people are careful in every action they take – whether it’s buying clothes in an online store or choosing new casino sites. That is why investors have started to work with anonymous cryptocurrencies.
The idea of cryptocurrencies is to put control over personal money back in the hands of the users themselves. Decentralized and anonymous digital currencies break the monopoly of banks. In 2023, two people can make a transaction without any controlling authority.
However, all transactions are prescribed in blockchain and tracked. Any crypto transaction can be tracked if desired. But there are systems where it is very difficult and sometimes impossible to do so.
What is the essence of anonymous cryptocurrencies?
Anonymous cryptocurrencies are necessary for everyone who values privacy on the network. Confidentiality and speed of financial transactions are important for business. Ordinary users want to ensure privacy.
The anonymity of many digital currencies is under serious criticism. All thanks to the “efforts” of financial regulators, who actively promote AMl/KYV requirements. The openness of blockchain implies that secret services, hackers, and even ordinary users can trace any transaction and identify the owner of digital coins.
Therefore, many developers realized the need to create truly anonymous cryptocurrencies that would provide users with maximum privacy.
A high level of privacy is achieved through the use of cryptographic protocols that make it difficult or impossible to track blockchain transactions.
Today we will talk about the 5 most anonymous cryptocurrencies.
Monero (XMR)
Monero rightfully holds the title of “the most anonymous cryptocurrency.” Monero uses a complex approach consisting of several features to ensure privacy:
- The CryptoNote algorithm effectively hides the personal data of the sender, the recipient, and the amount in the blockchain. Circular signatures are also used for this purpose: a transaction is signed by several addresses, and it is impossible to determine from which address the money went.
- Invisible stealth addresses are randomly generated for each transaction, guaranteeing the anonymity of the recipients’ addresses.
- Ring CT (Ring Confidential Transactions) anonymize the number of recipient addresses.
In the fall of 2018, Bulletproofs was activated instead of Ring CT, which reduced transaction size and fees.
Monero disadvantages:
- Large transaction size: Monero’s blockchain is 5 times larger than Bitcoin’s blockchain per transaction;
- Problems with scalability.
ZCash (ZEC)
This anonymous cryptocurrency is based on the Zerocoin protocol and uses the zero-disclosure proof protocol zk-SNARK to ensure privacy. It allows you to sign transactions without revealing personal information. Because of this, only the time of the payment is stored in the transactions.
Coins in the ZCash network are interchangeable, and it is impossible to trace who previously used a particular ZEC.
The peculiarity of ZCash is that both anonymous and public transactions work on an equal footing in the network.
ZCash disadvantages:
- The complexity of zk-SNARK technology and the need for verification;
- Large blockchain size: ZCash blockchain is 8 times larger than the Bitcoin blockchain per transaction;
- Higher fees due to the more powerful hardware.
DASH
As well as the https://royaljokerbet.com/new-casino/ website is popular in the casino world, DASH is one of the most popular coins on the anonymous crypto market, but anonymity on the DASH network is not the default option.
To hide their transactions, customers use the PrivateSend security system, which works on the principle of a mixer. It crushes the coins into small pieces, mixes them several times between multiple customers using random master nodes, and only then sends them to the final recipient. This multi-step mixing makes it impossible to track the connection between the recipient and the sender.
However, the system requires mandatory master nodes that retain information about the recipient and sender. Therefore, DASH cannot be considered a fully confidential cryptocurrency.
Komodo (KMD)
This is one of the most interesting anonymous cryptocurrencies. It combines the best features of Bitcoin and ZCash and works based on a unique consensus algorithm dPoW (Delayed Proof-of-Work). Delayed Proof-of-Work, in its turn, is a 2-level algorithm, which is a kind of “hybrid” of consensus achievement in two networks: Komodo and Bitcoin.
Since all transactions are additionally registered in the Bitcoin blockchain, the platform achieves a higher level of security, and even an attempt to hack the network is extremely difficult.
For intra-network transfers, a user can choose between regular and anonymized transactions. In the first case, public addresses are used – T addresses, data that is traceable in the blockchain. In the second, only the transaction itself is fixed, while the recipient and the amount of the transfer remain hidden.
Verge (XVG)
The cryptocurrency is a Dogecoin fork. Unlike other anonymous projects, where cryptographic methods are used to anonymize, Verge’s privacy is achieved through the use of I2P and TOR networks. They hide users’ real IP addresses and mix up the transmitted traffic.
Many users criticize this approach because it makes the network dependent on multiple relay nodes and increases the risk of hacking.
But with the Wraith protocol, users can choose whether they want to use public or anonymous transactions. In the latter case, stealth addresses are used to hide the details of the transfer.
Conclusion
It is very important to understand that the privacy mechanisms that worked yesterday may not be effective tomorrow. Knowing the increasing need of users to keep their lives private, including its financial component, developers do not stop working on anonymous crypto projects. New coins and new technologies are being created to hide personal information about the sender and recipient, as well as the terms of their transaction. Anonymity in the network has become an everyday reality, and users are not going to give it up.