Cryptocurrency was all the rage in 2022, no doubt in part to the incredible gains that some coins have posted over the past few years. Many investors that had never thought of buying cryptocurrency are now taking a closer look at the asset class. But whereas the financial press mainly focuses on the most popular coins, there are hundreds of alternative options in the cryptocurrency space. Many of these coins have advantages over names like ethereum or bitcoin, particularly concerning privacy.
What Is the Meaning of Private Crypto?
Although the blockchain technology that coins like bitcoin use is meant to be secure and anonymous, some coins manage to keep transactions even more private. These untraceable cryptocurrency coins use special technologies to hide the identities of users. They also often hide transaction amounts and transaction senders and receivers. This can make transactions untraceable. Some coins that top the list of the most private and secure are:
Read on to see how some of these alternative coins achieve this level of security.
1. Beam (BEAM)
A lot of the terms in the crypto world may seem unusual to the casual investor. Beam is a great example, as it uses the MimbleWimble and LelantusMW protocols which operate in the world of confidential decentralized finance. Beam is focused primarily on security, as transactions are private by default, and addresses are not stored in the blockchain. Although it uses the same unspent transaction output model as bitcoin, beam’s values are encrypted by so-called “blinding factors,” giving it an extra level of security.
2. Monero (XMR)
- Coin price: $163.15 as of Jan. 18, 2023
Monero is a private digital currency that allows users to be their own bank. Monero’s security technology hides transactions and users so that no one can see any individual user’s wallet balance or activity. This is what separates it from more mainstream coins with transparent blockchains, like ethereum or bitcoin. Monero’s creators state that their coin is the only cryptocurrency that makes every user anonymous by default. The amount of every transaction, in addition to the identity of the sender and receiver, is hidden through three specific technologies: Ring Signatures, RingCT and Stealth Addresses. As every transaction is private, it can’t be traced.
3. Horizen (ZEN)
Zen is the native cryptocurrency of Horizen, which uses Zendoo technology to allow developers or businesses to create their own public or private blockchains. Zen is a proof-of-work, Equihash-based cryptocurrency that offers two different types of addresses: Z-Addresses and T-Addresses. Z-Addresses are completely private and anonymous and are known as shielded transactions. T-Addresses are public and transparent, used for making bitcoin-like transactions on the blockchain. Users can choose which type of address they prefer if they want to control their privacy.
4. DASH (DASH)
- Coin price: $47.31 as of Jan. 18, 2023
Dash is a payment cryptocurrency that, as the name suggests, is meant to be a nearly immediate form of transfer. Dash is what’s known as a “fork” of the Bitcoin protocol, except it provides additional privacy features and has negligible transaction fees. Dash uses a two-tier blockchain network that includes both miners and masternodes. The purpose of the masternodes is to functionalities such as PrivateSend and InstantSend, which provide both untraceable and anonymous transactions. Dash, created in 2014, was the first private cryptocurrency.
5. ZCash (ZEC)
- Coin price: $43.15 as of Jan. 18, 2023
If you’re an Edward Snowden fan regarding privacy, you might want to take a look at zcash. In 2017, the infamous whistleblower supported zcash as “the most interesting alternative” to bitcoin. As with some other coins, zcash offers two types of transactions: shielded and transparent. Zcash offers enhanced privacy via “zk-SNARKS,” which stands for “zero-knowledge succinct non-interactive arguments of knowledge.” Although complicated, what matters to the average user is that zcash tries to improve the Bitcoin blockchain with enhanced security measures and supports fast block times, low fees and large block sizes.
If you are concerned with privacy when it comes to your investments, it might be time to switch your crypto over to more secure and anonymous options. Keep in mind that the crypto market is extremely volatile as of late and you should conduct thorough research before making your investment.
Chris Ozarowski contributed to the reporting for this article.
Data is accurate as of Jan. 18, 2023, and is subject to change.
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- CoinTelegraph. 2022. "Are Bitcoin transactions anonymous and traceable?"