5 Anonymous Cryptocurrencies To Keep An Eye On in 2018Date Written: January 5 2018 Written By: George Miller
Cryptocurrencies came about in order to protect people from centralized entities having access to and controlling sensitive personal data. Banks, insurance companies and other large corporations are run by a small group of people, and have your personal information stored on a single ledger system.
If this doesn’t sound trustworthy nor secure to you, you are not alone. Bitcoin was initially created to decentralize the monetary and transactional systems that are currently in practice today. More than ever before, people are concerned for their privacy due to the increased skills of hackers and the amount of sensitive information that is stored in multiple non-secure databases.
Cryptocurrency offers a new solution to these issues, and there are multiple entities that aim to provide their users with complete privacy, while also providing utility, speed and efficiency as well. There have been multiple protocols and ideas on how to best do this, and there are some truly innovative anonymous coins that you should be keeping your eye on not only as an investment, but as a useful tool for the betterment of society.
What Elements Make Up A Good Anonymous Coin?
The root of cryptocurrency was founded based on the need for a decentralized system of operation when it comes to the entire transactional process, transferring the power from powerful CEO’s and small groups of directors to the masses. The cryptocurrency industry aims to do this through cryptographic encryption and a spread of power to every individual who participates, keeping the governing power distributed to the community.
The pseudonymous characteristics that Bitcoin brought with it was initially associated with criminal activity, although this was merely a side effect of its innovative technology. It has the potential to distribute the wealth within the advertising, banking, and retail industries. The key factors that make up a good truly anonymous coin include:
Each transaction you engage in should be completely anonymous, and most importantly be untraceable. Basic info such as the transaction amount, date, and time are usually displayed, but sensitive information is not accessible to ANYONE.
Fungibility basically means that every coin should remain equal in value to one another, enabling them to be interchangeable between parties as well being able to be accepted by any entity or wallet. Mining techniques play a role in this as well. The more fungibility, the greater the utility.
5 Anonymous Coins to Watch in 2018
Here are 5 coins that are providing creative solutions for those looking for the utmost security and anonymity when transacting (not in any specific order):
An early derivative of Bitcoin, Zcash utilizes what is called zero-knowledge snarks. This system of privacy enables you to prove that the information you are sending to the other transacting party is true, without publicly displaying this sensitive information to the entire network. This is done on the blockchain, and the information is automatically verified without being displayed, all that is shown is that the transaction is completed.
Zcash utilizes cryptographic encryption, enabling all transactional data to remain private to the user. They also offer the option to use what is called “shielding”, where only certain information is revealed, while other pieces that you identify can remain public.
The main drawback of Zcash is that the completely anonymous transactions are not efficient, and require a significant amount of time and processing power to complete. Only about 6% of the total transactions on Zcash are completely anonymous, with the rest being readily available for viewing through their public blockchain.
One of the original privacy coins to hit the mass public eye, Monero is private-by-default cryptocurrency that has multiple privacy protocols that help it remain the leader in anonymous coins. This coin uses what are called ring confidential transactions and stealth addresses. One of the key privacy features Monero offers is not allowing for addresses that have transacted in the past to be able to be linked together or associated by hackers or outside parties, which is accomplished through stealth addresses. Randomized, one time use only addresses are generated for each transaction on the sender side, which makes these transactions untraceable.
Stealth addresses could be tracked by blockchain output in creating these unique addresses, but the ring signatures features solves this issue. In its simplest terms, this is done by grouping together multiple transactions throughout the blockchain, which in term masks transactional relationships.
Dash claims to be an instantaneous anonymous cryptocurrency that utilizes what are called “master nodes” along with a self governing community system. Dash was originally used to help provide anonymity to bitcoin transactions. The innovation of Dash comes in the form of “mixing”.
Dash in not completely private, its mixing service is an optional feature of the currency that uses the transactional info to be mixed through the use of master node. This master node mixes the info and sends the outputs to random locations, and along with cryptographic encryption enables complete privacy. Dash’s governance is setup in a very unique manner, and any fraudulent activity is massively de-incentivized due to the 1,000 Dash coin fee to use the master node.
Verge is very unique in its cryptographic privacy, as all of the information related to the transactions are publicly auditable by way of the blockchain. Verge’s innovation comes by way of Tor and I2P routing. This mode of privacy works by obscuring and concealing each users IP address when engaging in transactions.
Using their newly implemented “wraith protocol”, users can either have their transactions completely anonymized or just partially anonymized. Verge offers a quick and easy method of anonymous payments.
Zencash is a pure privacy coin. On top of allowing for private, off the blockchain transactions, Zen also allows users to attach messages with their transactions as well that allow for context to be attached to these transactions.
Another unique aspect of Zencash is their anonymous posting system. This system enables users to publish a post anonymously on any topic, without revealing their identity. Zencash is derivative of Z cash, which was a derivative of bitcoin, making it a distant relative of the original cryptocurrency model.
While Zencash does not completely change the game in many ways, its anonymous messaging and posting and unique block rewards system that provides funding for improved development and scaling make it an asset to keep your eye on in 2018.
Conclusion on Anonymous Cryptocurrencies
Anonymity was one of the main reason cryptocurrency was invented, and providing secure, “off-the-grid” transactions are very appealing to those who wish to keep their sensitive account information away from open, centralized ledgers that the typical bank uses.
All of the cryptocurrencies listed above are striving to provide this functionality to the world, while doing so in their own unique way. If these coins can scale and prove their use cases to a mass user base, they may have a better chance at increasing their technological and financial value in 2018.