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Cryptogambling / What are Privacy Coins? Uses Cases and Future

What are Privacy Coins? Uses Cases and Future

Publish Date: 25/04/2023

We often hear that Bitcoin and other currencies are anonymous but in truth, they are pseudonymous. Their transactions are public and every activity can be traced on blockchain.

The case is different for privacy coins.

Privacy coins are cryptocurrencies that protect the information that can link users or senders to a transaction, as well as other data such as the amount transacted and the available balance of the wallet address.

Although, not all privacy coins are entirely anonymous, as they offer varying degrees of anonymity. Thus, we will look at some use cases and the future of these coins in this article.

What Are Privacy Coins?

Privacy coins are cryptocurrencies that allow anonymous transfer of value by hiding the transaction information as well as making asset tracking mostly impossible.

Use Cases of Privacy Coin

  • Financial Privacy: If you are the type that likes keeping your identity a secret when carrying out a transaction, then you are in the right place. This can also help protect you from theft, fraud and other transactional or financial crime.
  • E-commerce: With the high rise in online shopping as well as cyber security issues attached to using your card on websites Privacy coins can be used to purchase goods online while providing you with a level of security and privacy for both parties involves in the trade.
  • Defi Applications: Decentralised Finance (dApps) also allow users the chance to use privacy coins as a form of payment without revealing their identity. This is good considering the various report attacks in the Defi space lately.

Top 6 Privacy Coins

Monero (XMR)

Monero is one of the prominent privacy-focuses assets. Launched in 2014, Monero uses blockchain with privacy-enhancing technologies that can be used to trade or spend.

The open-source currency uses a Proof-of-Work algorithm, RandomX, to validate transactions.

The majority of users value Monero for its stealth and confidentiality. It allows users to make transactions in cryptocurrencies whenever they choose for whatever reason without worrying about being observed by authorities, hackers, or any other third party.

Zcash (ZEC)

Confidentiality and anonymity are the main focuses of the decentralized cryptocurrency Zcash.

It makes use of the zk-SNARK zero-knowledge verification technique, which enables network nodes to confirm transactions without disclosing any sensitive data about those transactions.

Zcash’s main advantage lies in its optional anonymity, which allows for a level of privacy unattainable with regular, pseudonymous cryptocurrencies like Bitcoin or Ethereum.

Dash (DASH)

Another popular cryptocurrency with privacy characteristics is Dash. The currency offers a feature called PrivateSend that enables users to conduct transactions anonymously if they so wish.

Dash provides a second layer of security via its network of specialist servers called ‘master nodes’. Many cryptocurrencies have copied this innovation since, but Dash was there first.

Oasis Network

In addition to providing privacy and confidentiality within its network, the Oasis Network also develops a number of distinctive technologies that support its consensus model.

The Oasis Network uses a unique architecture that integrates multiple privacy-enhancing technologies to provide users with greater control over their data, including secure enclaves, differential privacy, and zero-knowledge proofs.

In general, Oasis Network seeks to offer a solid and adaptable architecture for creating decentralized apps that may run effectively and safely in a setting that protects privacy.

MobileCoin

A mobile-friendly cryptocurrency with a privacy focus is called MobileCoin. It strives to provide quick and safe transactions with an emphasis on user privacy, accessibility, and usability.

MobileCoin is a cryptocurrency built on the CryptoNote protocol, which is renowned for its robust privacy features. To enable quick and secure transactions, MobileCoin uses a protocol called Stellar Consensus Protocol (SCP).

Ring signatures, stealth addresses, and zero-knowledge proofs are some of MobileCoin’s security features that let users finish transactions without disclosing their identities or the specifics of their financial activities to the general public.

Because of this, MobileCoin is especially appealing to those who value security and privacy.

Keep Network

Keep is a network that rewards users for securely storing and encrypting private information on a public blockchain.

The KEEP work token makes the network totally permissionless and is made up of off-chain keeps, which are containers for private data.

Users can stake KEEP tokens to be randomly selected to earn fees by performing services on the network such as encryption or data storage.

Can Privacy Coin be Used Among By Cybercriminals?

Privacy coins like every other crypto technology are susceptible to good and bad use cases.

There have been many cases of cybercrime related to Bitcoin and other types of cryptocurrencies such as DDOS attacks, money laundering, ransomware, crypto dust attacks and so on. This is why companies and compliance organisations have been trying to beef up security as well as track transactions on blockchain trials.

Now, imagine when it cannot be tracked because of the coin’s untraceable feature. this is why cybercriminals are turning to currencies like Monero, Zcash and Verge which have additional anonymity built into them.

It is therefore imperative to be on the look-up when using any of these coins. Thi can help you protect yourself.

The Future of These Coins

Uncertainty surrounds the privacy coin’s future. Although they have many applications and advantages, they have also been linked to illegal acts including tax avoidance and money laundering. Global regulators are starting to crack down on cryptocurrency anonymity, which might make it more challenging for privacy coins to function. However, mainstream consumers who are concerned about their financial privacy are now utilizing privacy coins more frequently.

The long-term viability of privacy coins will rely on how authorities decide to handle them and how widely they are used by regular users.

Signing Out

Cryptocurrencies known as “privacy coins” allow users to conduct transactions anonymously and safeguard their financial privacy. In addition to preventing identity theft and financial fraud, privacy coins also enable international remittances and offer a high level of privacy and security for online purchases.

Although privacy coins have been linked to illicit behaviors like tax evasion and laundering funds, they are also growing in popularity with regular users who are worried about their financial privacy.

However, given that regulators all around the world are beginning to tighten down on bitcoin anonymity, the future of privacy currencies is dubious. It is yet unclear how privacy coins will respond to these legislative obstacles and whether they will keep gaining popularity among regular users.

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