You’ve probably heard the argument that Bitcoin is not private. One of the many quirks of the way it uses blockchain technology means that any transactions made can be easily tracked and traced. This is true of most cryptocurrencies. And should be a concern for anyone who believes that their financial transactions should remain private.
Several coins have emerged that tackle this issue. From Spectrecoin (which gained %50,000 since it’s ICO) to Cloakcoin which listed on Binance earlier this month. There are many privacy coins — but Monero is currently king.
Monero was created back in 2014 to combat Bitcoin’s lack of privacy. It’s the top privacy coin in terms of market cap, and community involvement on Reddit (and other social channels). Monero brought the privacy coin idea mainstream.
Like any great idea, people have started building upon Monero in their own ways. You probably know about many successful privacy coins, including the likes of Dash, Verge, and ZCash.
However, you may not have heard of their new rival, forked off of Bitcoin itself, Bitcoin Private.
What is Bitcoin Private?
Bitcoin Private (BTCP) is a hard fork of both the ZClassic and Bitcoin blockchains, and it could be devastating to Monero’s grasp of the privacy market in cryptocurrency.
The name “Bitcoin” brings a lot to a coin. Bitcoin Cash, Bitcoin Gold, and Bitcoin Diamond have all seen surges in popularity. Bitcoin Private is in the novel position of being the first privacy coin forked off of Bitcoin.
There are three core areas we can assess a privacy coin on and it’s potential to dominate the market:
- User base
Lets see how Bitcoin Private stacks up to the current market leader Monero.
Bitcoin vs. Monero
Monero’s has a large and active user base. Lots of people mine, trade, and hold XMR every day.
However, there is an argument to be made that more people hold Bitcoin Private.
Bitcoin Private is a hard fork of both Bitcoin and ZClassic. This means that they paid out both ZClassic holders (1:1) and Bitcoin holders (1:1). This means that everyone that had shares of ZClassic and everyone that had shares of Bitcoin in wallets that they had access to now hold Bitcoin Private.
That’s a lot of people!
A largely distribute coin means more trading, more publicity, and paves the way for long term growth.
The fork from both of the blockchains makes Bitcoin Private arguably one of the most widely distributed coins there.
Both Monero and Bitcoin Private claim to have private transactions while utilizing different technologies, but one type of technology is actually more private than the other.
Monero implements most of its privacy through ring signatures. Ring signatures are an old man’s technology in the privacy game. They hide the transactions of XMR by using a one-time stealth address, which has worked great up until the Monero started being forked to create other coins. On April 4th Monero forked and split into four different projects.
Monero forks have brought up a lot of uncertainty about the true privacy of the ring signature system. Because ring signatures encrypt a transaction and then store that transaction on the Monero blockchain as a key image, when a fork occurs privacy can be compromised.
Let’s imagine a guy named Tim that holds some XMR. After a fork, Tim will be awarded the new coin based on coins he already has in his wallet. So now Tim has XMR and a new coin from the XMR fork.
When he spends the new coin, he creates a key image which will be encrypted and put on the new coin’s blockchain. Now, when he spends XMR from his wallet, the same key image will be created and validated on the XMR blockchain.
By matching key images from the forked chain to the original chain, it is now possible to trace Tim’s transactions with both XMR and the new coin! This is a severe privacy flaw with the Monero forks. It isn’t the Monero team’s fault this is occurring, but there isn’t much they can do about it now.
Bitcoin Private uses the technology that was implemented with ZClassic, called zk-SNARKS, of which the “zk” stands for “zero-knowledge.”
Before talking about the upside of zk-SNARKS, it’s important to note that it lacks the peer review that ring signatures have. However, it is definitely a promising technology for private transactions.
The zero-knowledge proof system employed with Bitcoin Private is much different from Monero’s ring signatures. zk-SNARKS is a system of keeping transactions private by making the entire blockchain private instead of sending key images to it.
This form of cryptography not only hides both the identity of the sender and receiver, but it also hides all metadata about the transaction.
zk-SNARKS isn’t systematically more private than ring signatures. However, the recent forks on Monero compromise all privacy for the holders of XMR.
As it currently stands, Bitcoin Private is more private than Monero.
Monero has always had a pretty tight knit community, but the recent fork has done some damage.
Any time you see multiple forks off of a blockchain at the same time, it means there are quite a few people that don’t agree with what you’re doing. Each fork takes community members and development talent away from the main project.
Bitcoin Private is a very new coin, but they have a strong (albeit small) community to build upon.
Bitcoin Private is rarely seen being talked about in a negative way on social media. They have a growing community presence on both Twitter and Reddit. And as more Bitcoin holders that held onto their BTCP after the fork realize its true potential, the community will get continue to grow.
Bitcoin Private is absolutely a coin to follow in the privacy coin community, which is an overall strong community in itself.
The scenario is very similar to Verge. Verge is a privacy coin that rose through the ranks incredibly fast. If Monero had true dominance of the privacy community, such an event wouldn’t have happened.
Conclusion: Bitcoin Private is one to watch
We have now outlined all the ways in which Bitcoin Private could surpass Monero as the number one privacy cryptocurrency.
Bitcoin Private employs a technology that is more private than the current state of Monero, has a larger user base, a growing community, and a strong claim to be the next up and coming privacy coin.
This isn’t to say that Bitcoin Private is going to take over Monero any time in the near future, but those with a strong interest in Monero should definitely keep an eye on it.
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