It will be sheer waste of time to argue the fact that cryptocurrencies are the future of financial transactions. The increasing popularity of this technology has seen the likes of Bitcoin and Ether becoming accepted as payment methods. As Bitcoin becomes conventional among crypto-users, concerns about privacy have increased. This is hinged on the reality that Bitcoin transactions can be viewed publicly on the network. In other words, Bitcoin transactions provide the leeway for anyone to view current and future balance of any Bitcoin address. This has even gone worse in cases of wallet hacking. Lack of anonymity is perhaps one of the greatest challenges Bitcoin users face. This is also similar with Ethereum with up to $32million dollars’ worth of Ether reported stolen by hackers in July 2017.
Most cryptocurrency users believe privacy is important while carrying out transactions. As a result, focus is beginning to shift to some altcoins that have been developed to plug the anonymity loophole. Among such privacy-based altcoins are Monero, Dash and Zcash. These altcoins are unique in their respective ways and in terms of technology involved in providing privacy. Users also have varied reasons for opting for some of them. Perhaps, such reasons are premised on their growth potentials as well as transaction confirmation speed and marketability.
Monero is another privacy-based virtual currency created in 2014. It is based on a cryptonote feature which provides strong anonymity/privacy. This was further strengthened earlier in 2017 with the adoption of an improved version of Ring Signatures known as Confidential Transactions. This ensures amounts transacted over the Monero blockchain remains hidden. Users are beginning to view this cryptocoin as one with great potentials based on its listing on Poloniex where it is a trading pair with every major coin.
Dash (formerly known as Darkcoin and XCoin), aims to be the most user-friendly and most on-chain-scalable cryptocurrency in the world. It’s core focus is on private transactions (PrivateSend) which makes it an attractive currency for privacy concerned individuals, it also features a self-governing and self-funding model that enables the Dash network to pay individuals and businesses to perform work that adds value to the network. Dash’s decentralized governance and budgeting system makes it a decentralized autonomous organization (DAO).
Zcash has an optional privacy feature that allows users to either choose to be anonymous or not. It became officially known as Zcash in 2016 after transforming as an outgrowth of the Zerocoin project which was initiated to improve anonymity for Bitcoin users. This coin’s privacy feature is based on zk-SNARK encryption which stops double spends and ensures transactions within the network remain untraceable.
In conclusion, Bitcoin is obviously lacking in privacy features, although its position as a crypto-market leader is undisputable. Categorically stating that an altcoin will take over this position any time soon will be a tall order. However, with the prying eyes of uninvited government officials and activities of nefarious elements carting away millions of dollars’ worth of crypto-investments, users are beginning to consider privacy-based cryptocurrencies as substitute value. While Monero, Dash and Zcash are still evolving, their remarkable privacy features will continue to attract investors.