While most people consider every cryptocurrency transaction anonymous, that’s not the case. Bitcoin, for example, has all transactions recorded on a public ledger, which can be easily accessed. In theory and practice, it’s entirely possible to associate a Bitcoin address with an individual, especially if he has ever used a cryptocurrency exchange, which requires identity verification.
However, the apparent need for a fully anonymous payment option ultimately led to the creation of such, called privacy coins. During this week, turbulent movements, a lot of them recorded serious gains, and it’s perhaps to have a closer look.
What Are Privacy Coins?
Privacy coins conceal all the information from both the sender and the recipient. They don’t provide any data on the amount of the transaction when they take place and ultimately leave absolutely no traces or records behind.
With this being said, a lot of people consider that privacy coins are generally used by criminals since the transactions are untraceable. One valid example here may come from the kidnapping of a Norwegian multimillionaire’s wife last year. The perpetrators reportedly requested a ransom for $10 million to be paid in one of the most popular private coins – Monero.
However, this report from Q2 2019 indicates otherwise. It examines cryptocurrencies’ involvement in illegal activities, and it concludes that privacy coins are responsible for just around 4% of all similar transactions.
A more popular usage is the basic need of most regular people to protect their anonymity from central authorities and governments. This is where the demand for such coins surfaced in the first place.
Notable Privacy Coins Examples
As with most cryptocurrencies, there are already several well-established privacy coins in the market.
Monero is one of the most popular at the moment. It’s also one of the largest cryptocurrencies, as it’s currently situated in 11th place. Besides, it has received a lot of widespread adoption with many different outlets.
Dash is another prominent example of such a coin, which is based on Bitcoin’s software. It continues to grow over the years, and just recently, it partnered with Burger King Venezuela. Dash will be offered in 40 different locations where people can use it to purchase burgers, for instance. Its price also reacted accordingly and surged with over 80% in a day.
Dash: Focusing On Real Solutions
Cryptopotato recently had the opportunity to speak with Dash Core’s Business Development Manager for LatAm, Ernesto Escalona, regarding the price movements and company’s updates. He talked about the recently released Dash Platform on EvoNet, which is a “technology stack for building decentralized applications on the Dash network.” He also mentioned Venezuela’s adoption that adds further real usage for Dash.
“We believe the recent positive price action is a reflection of Dash constantly working on fundamentals to allow real use of cryptocurrency. […] So getting cutting edge technology deployed, and focusing on real solutions seems to be getting the attention in 2020, and we will keep working to make real adoption happen!”
As a response to the above, the Dash team added that they are a “user-centric coin with a privacy feature on one wallet and not a privacy coin.”
Zcash falls under the category of privacy coins. The company is behind the Zk-SNARK protocol, which a part of the zero-knowledge proof system. Moreover, it was also recently endorsed by the famous whistleblower Edward Snowden.
A lot of people wonder why I like #Zcash despite the Founder’s Reward. Here’s a reason: that tax funds a quality team that catches and kills serious bugs in-house, before they get exploited. Some other projects learn about bugs like this only AFTER people have lost money. http://t.co/i9MD1CpeNx
— Edward Snowden (@Snowden) February 5, 2019
Other examples for privacy coins are Horizen (ZEN), Verge (XVG), Bytecoin (BCN)< Zcoin (XZC), PIVX (PIVX), and more.
Naturally, one can’t overlook the price for a particular coin, especially if he considers taking advantage of their potential as an investment, rather than transmitting payments.
By looking at all charts, one can get some general and conclusive information on how all privacy coins were handling the different trends. For example, during the parabolic price increase of late 2017 and early 2018, all of them reached their respective all-time high (similarly to most cryptocurrencies that existed back then.)
Monero (XMR) was to almost $500, while Dash hit $1,642 in December 2017. Then came the price crash, and all of them followed closely. Just for reference, XMR noted a 92% decline to $42 in late 2018, while DASH’s drop was 96% to $63.
Is The Positive Privacy Coin Trend Back?
Despite the price crashes of 2018, most of them appear to be on an extremely positive trend as of the last few weeks. XMR recorded a 10% increase in the previous seven days. Zcash posted 66% gains, and Zcoin was up with 60% in the same timeframe.
Dash managed to surge by 140% to about $125. Besides, DASH entered the top 10 currencies by market cap at one point but it retraced since then.
These movements had the crypto community speculating on whether or not privacy coins are returning to the grand scene. They had a significant role during the previous major bull cycle, and some consider their latest increases as an indication that another one is to come. While it may be too early to conclude this theory to be valid, it’s still worth checking the possibility of actually occurring soon.
Even though all of the privacy coins declined a bit in the past couple of days, the surges were notable and it’s interesting to see whether 2020 will be positive in this regard.