Regulatory pressure from governments, local central banks, and specialized law enforcement is pushing cryptocurrencies to adopting privacy-focused capabilities. That’s precisely how TeleCoin found itself building the Trend-Setter platform and why Charlie Lee, the founder of Litecoin, announced confidential transactions for its coin.
Given all the recent legal actions with crypto exchanges being shut down, Coinbase forced to give user records, and India banning cryptocurrency use entirely, coin owners aren’t having the best time right now. A couple of years ago, being an early adopter meant being a part of the geek club, and that club came with a significant profits. But after 2018, while the market can still be considered in its early stages, being an early adopter is neither cool nor profitable anymore. It can come with a lot of legal hurdles.
That’s where private coins with high-encryption techniques and mixing technology comes into play, helping cryptocurrency users have anonymized transactions. The market demand encouraged many teams to use their knowledge into crafting a unique token with privacy-focused features, leaving us with a long list of options to choose from.
With so many choices, making a choice might seem hard. Regardless of using ring signatures like XMR, masternode capabilities like TELE, or shielded addresses like ZEC, they all have one purpose: to ensure the survival and success of cryptocurrencies. Below, I crafted a hand-picked list of the most advanced projects to help you for the time being.
TeleCoin’s TELE is a community project with the goal of building an anonymous peer-to-peer network. It’s built on top of the Dash and PivX projects, which will be covered later in this article. What makes TeleCoin special is its ability to implement the features of all other projects under one network.
Under the hood TELE network is based on Proof of Stake, private transactions, masternode capabilities, and a decentralized blockchain voting system. Besides the network itself, TELE is expanding its use cases towards microtransactions by developing the Trend-Setter platform, an affiliate network reward platform targeted to both business and individuals. While most privacy coin users are complaining about not being able to actually spend their tokens, TELE owners could benefit from this ability right away. Why should you wait for adoption when you could create your own architecture? That’s exactly what TeleCoin did.
2) Monero — XMR
Maybe the most popular private coin in existence today, Monero’s transaction sources and destinations are untraceable. The technology behind it is known as the CryptoNight Proof-of-Work protocol that uses ring signatures to obfuscate the ledger of transactions, which by default is public for the blockchain. This also means that it is not possible to know the total of XMR coins held by a particular node.
WannaCry hackers opted to convert their ransomware stash into Monero to escape scrutiny from authorities. Monero was the most popular cryptocurrency used for transactions on AlphaBay, the largest marketplace on the darknet. Actually, even after the authorities shut it down, they were unable to estimate the transacted amount. Regardless of its popularity among web drug dealers and hackers, these are pretty impressive accomplishments. However, a recent study done by a team of researchers revealed that it is possible to extract individual transactions. Not as private as you might believe.
3) Zcash — ZEC
When it comes to privacy coins, there is this belief that most people are using them for illicit activity. As Josh Swihart, Marketing Director of Zcash, states, “private and legal are not antonyms”. That’s why Zcash has two types of transaction options: one that’s happening on the public ledger, and one that keeps the individual address shielded, allowing for anonymous trading.
Even if the actual transaction data is encrypted, Zcash remains compliant with regulatory agencies at the cryptocurrency exchange level where AML/KYC controls are applied at the point of exchange between fiat and ZEC. They are not willing to help criminals, they are offering protection to law-abiding citizens and guarding them against bad actors.
4) Dash — DASH
Dash is one of the oldest privacy coins, having undergone a name change twice since 2014. First it was called Xcoin, then Darkcoin, and now Dash. The coin is a fork of Bitcoin and its privacy component is treated exactly as an added feature. It’s called PrivateSend. It’s optional, and it’s able to hide the chosen transaction data within its mixing mechanism.
It makes it easy to follow the ledger and the transacted amounts, while individual transactions can’t easily be traced. As Ryan Taylor, CEO of Dash, states, “[Privacy] is also a safety issue for users that could be targeted by criminals that become aware of a user’s holdings by tracing their transactions.”
One of the newer kids on the block, Incognito is a different sort of privacy project. The product offering is not a privacy coin but a decentralized platform for any coin to become its own privacy coin. This means users don’t need to buy Zcash, Monero or even PRV to conduct private transactions – they can simply turn on ‘incognito mode’ for their existing assets, like BTC, ETH, BNB, etc. PRV is Incognito's native work token and block reward currency – used for staking purposes on the Incognito Blockchain.
“We’re trying to give crypto users a choice”, said Duy Huynh, Project Lead of Incognito. “No matter which assets they hold, they have a right to privacy. They deserve to have control over their funds and their identities”.
The Incognito Blockchain is designed to attach to other blockchains like Bitcoin, Binance, and Ethereum to facilitate two-way transfers of crypto assets whenever privacy is needed. All transactions made on the Incognito Chain are confidential and do not appear on public ledgers until they are transferred back to their original blockchain. As a platform for privacy coins, Incognito also boasts its own privacy-first, permission-less DEX, allowing users to trade any pairs they choose to, completely anonymously.
6) PivX — PIVX
PivX company went a step further towards those who need privacy for their transactions. As Simon Fischer, the founder of FusedHelios, a PIVX Class, explains, “PIVX is trying to level the playing field to make privacy a right and policy for everyone — not just the wealthy or the corrupt.” They are aiming for an onchain solution; a decentralized marketplace based on the PIVX network, zDEX.
In this case, there is no central point for its running network. There’s no one to arrest or sue to bring it down. As long as there are PIVX users, the network will remain active. As Jim Haggerty, PIVX’s Community Leader informed its users, it becomes the highest priority for them as privacy coins seem to become the target of regulators.
Private coins got criminals’ attention while cryptocurrencies were accessible, legal, and unregulated. Now that the market is shaken up by governments attempt to introduce more restrictive regulations, mainstream consumers are finding their benefits. The growth in demand is already served by the acceleration of technical developments regarding anonymity features. Governments and regulators are already aware of this, given the fact that India announced that private coins are their first priority. Given the fact that projects like TeleCoin and PIVX are making significant technical advancements against authorities, we can look forward to a crypto space with more privacy-focused options and subsequent price increases for the best of them!