Best Privacy Coins 2018 Guide

WHAT ARE PRIVACY COINS?

While there are heaps of cryptocurrencies in the online world, many – such as Bitcoin (BTC) – do not have adequate privacy features due to their ledgers (log of transactions) being transparent.

This means that with a little snooping, someone could potentially link your transactions to you. In some cases, they might even be able to deduce the amount you have in your wallet. Even if you’re not performing illicit transactions online, the idea of your online activity being transparent to a complete stranger is not a rosy one for many.

With these shortcomings in mind, some investors have chosen a more discrete option: privacy coins.

In short, privacy coins have added features to help obfuscate your identity, transaction history, and wallet amount.

With that being said, we’re going to delve into some of the best privacy coins the Internet has to offer in 2018.

1. DASH

A popular choice amongst investors, Dash (DASH) currently has a market capitalization of USD3.2 billion (as at March 16, 2018).

To achieve anonymity, Dash uses a platform called PrivateSend, which goes through the following process-

• it breaks down the transactions into specific denominations (0.01, 0.1, 1, and 10 DASH)
• your wallet then sends a request to master nodes, asking for permission to mix coins
• the master node will mix coins with said denominations from different users
• coins are sent back to their respective owners in a different address (change address)
• step 2 to 4 repeats multiple times with each denomination.

By doing so, PrivateSend makes your coins indistinguishable from the other coins in the network.

Furthermore, Dash transactions are quick and almost instantaneous. It is easy to use, accessible and designed for mass adoption.

However, Dash has a shady origin. Its creator, Even Duffield, was accused of mining the first one million coins of the token, and critics argue that this gives Duffield a disproportionate amount of control.

Not only that, PrivateSend is an optional feature. Hence, those who do not opt for it are exposed to the same risks as others who use ‘non-private’ tokens.

On the whole, though, Dash’s popularity stems from its user-friendliness; currently, it is also one of the most used privacy coins on the Interweb.

DASH Summary Comparison

Coin Symbol: DASH
Consensus: Proof-of-Work
Block Time: 2.5 minutes
Max Supply: 18.9 million
Privacy Tech: PrivateSend

2. MONERO

For fans of Monero (XMR), they see this particular coin as the leader of the pack. Its top-notch privacy functionalities have also made it the go-to coin for Dark Web transactions.

With a market capitalization of USD3.3 billion (as of March 16, 2018), it is commonly touted as a stable coin.

To provide optimal anonymity, Monero uses stealth addresses to remove your transactions from the Blockchain.

Additionally, it utilizes protocols such as Ring Confidential Transactions (RingCT), which allows networks to verify transactions without revealing the underlying amounts.

And, if that’s not enough, the Monero team is adding more functionalities into the works. These include Tails OS integration and Kovri, which are overlay-networks that obscure your IP address.

Nevertheless, whatever Monero makes up for in privacy, it lacks in user-friendliness. Also, its platform takes time to learn and is not easy to master, reducing the likelihood of mass adoption.

On top of that, many wallets have not supported it, making the coin quite inaccessible.

That being said, for the most part, Monero is known for its reliability and is often seen as a genuinely interchangeable and stable privacy coin.

Monero Summary Comparison

Coin Symbol: XMR
Consensus: Proof-of-Work
Block Time: 2 minutes
Max Supply: No Max
Privacy Tech: Ring Signatures

3. Z CASH

Of all the coins in this list, Z Cash (ZEC) is the only one that uses Zero-knowledge Succinct Non-Interactive Argument of Knowledge proofs (zk-SNARKs), a method that can authenticate transactions without revealing its details – a.k.a. sophisticated encryption.

It also has a respectable market capitalization of USD820 million (as of March 16, 2018).

However, just like Dash, Z Cash’s zk-SNARKS is an optional feature. Moreover, the team states that Z Cash does not –

• encrypt data for multisignature
• hide IP addresses
• protect against public cryptocurrencies transactions

As such, these limitations have led some to write the coin off as a properly private cryptocurrency.

That being said, Z Cash has a few heavyweight supporters behind it. They include Gavin Andresen (Bitcoin Foundation Chief Scientist) and Vitalik Buterin (Ethereum Creator).

Also, the coin is generally easy to use and boasts an impressive team made up of reputable university scientists and cryptography specialists.

However, there are some considerations to make. As Zerocoin Electric Coin Company owns the coin, this ownership brings about a certain level of centralization, which some may find uncomfortable.

Zcash Summary Comparison

Coin Symbol: ZEC
Consensus: Proof-of-Work
Block Time: 2.5 minutes
Max Supply: 21 million
Privacy Tech: Zerocash Protocol

4. VERGE

Founded in 2014 and with a market capitalization of USD465 million (as of March 16, 2018), Verge (XVG) is one of the newer coins on the list.

However, do not let its lack of maturity throw you off. Many have suggested that Verge shows a ton of promise and is one of the more undervalued coins in the market.

Its key feature is the usage of multiple privacy networks (I2P and Tor), which gives users a decent amount of anonymity; it, too, is one of the few coins that directly connects to I2P nodes.

Not only that, the coin also boasts ultra-fast transaction speeds, a key aspect that most users would appreciate.

Nevertheless, Verge is still a work in progress. During its early days, some users found a few grammatical errors in its black paper.

Overall, Verge shows potential. Moreover, the cryptocurrency has a proactive developer team supporting it. No doubt, Verge’s undervalued market capitalization also suggests that the coin has plenty of room to grow.

Verge Summary Comparison

Coin Symbol: XVG
Consensus: Proof-of-Work
Block Time: 30 seconds
Max Supply: 16.5 billion
Privacy Tech: TOR / i2P

5. BYTECOIN

Created in 2012, Bytecoin (BCN) is one of the older coins in the market and has a market capitalization of USD479 million (as at March 16, 2018).

That being said, the coin utilizes CryptoNote – a mix of one-time stealth addresses and ring signatures protocol to maintain anonymity.

However, Bytecoin’s journey wasn’t always smooth sailing. Over the past few years, it has faced challenges in the form of polarizing developer camps and has been a part of – in many investors’ opinion – too many forks.

As such, for those more critical, Bytecoin’s rebranding efforts as a safe and secure privacy coin may be a step too late in the right direction.

And, similar to Dash, Bytecoin’s developers were rumoured to have premined the first few coins. Again, this brings about the unpopular notion of centralization.

Notwithstanding this, Bytecoin’s Cryptonote is still seen as a fortified privacy function. It is also noteworthy to mention that transactions on Bytecoin have, for the most part, been untraceable.

ByteCoin Summary Comparison

Coin Symbol: BCN
Consensus: Proof-of-Work
Block Time: 2 minutes
Max Supply: 184.47 billion
Privacy Tech: Cryptonote

6. PIVX

Originally called DarkNet, PIVX was created and forked from DASH on Feb 2016. Although new, it currently has a decent market capitalization of 216 million (as of 16 March 2018)

PIVX stands for Private Instant Verified Transaction, and unlike the other privacy coins in the list, uses a Proof-of-Stake consensus.

It seeks to achieve privacy decentralization and also, with its SwiftTX technology, get fast and private transactions so it can achieve real-world adoption.

PIVX’s strength is in its community centric-ness as well as its ambitious goal to combine privacy, decentralization, instant transactions, good governance, environmental friendliness through Proof-of-Stake.

At first look, PIVX seems to solve many of the problems that plague the earlier cryptocurrencies. Technology-wise, it appears to be one of the front-runners in the privacy coin race.

However, putting it side by side to DASH, it loses out on the important first-mover advantage.

At this point, more merchants have adopted DASH as its preferred coin for transactions and DASH has a larger user base. (DASH has about 13x market cap). However, this is understandable as DASH has a 2-year head start.

PIVX Summary Comparison

Coin Symbol: PIVX
Consensus: Proof-of-Stake
Block Time: 60 seconds
Max Supply: Unlimited
Privacy Tech: Zerocoin Protocol

Conclusion

There are many coins on the Interweb that assure anonymity and untraceable transactions. But, as with most things, each has its benefits and drawbacks.

Though some coins show more promise than others, there is no clear leader in the current ecosystem yet. Only time will tell and separate the truly anonymous privacy coins from their ‘less private’ counterparts.

What is your favorite privacy coin of 2018? Put your answer in the comments below!

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