If there is something that traders can count on when it comes to the crypto market, it’s the fact that they are in a decentralised and anonymous environment. This lets them trade in peace without worrying about being tracked by institutions or third-party organisations.
If you are searching for something that will further define the privacy and anonymity offered by cryptocurrencies, then look no further. Privacy coins are the best option for those who wish to keep their online activity private and enjoy investing without the watchful eye of anyone else.
To get started, you’ll have to understand what privacy coins are and how you can get your hands on them! You can learn more about these and what they have to offer in the coming sections.
How do privacy coins work?
You might be thinking that cryptocurrencies in general already offer anonymity, so what makes privacy coins so special? As the name suggests, privacy coins are cryptocurrencies that offer heightened privacy and security when transacting by making the sender and recipient completely anonymous and untraceable. This is possible through different strategies such as using stealth addresses, ring confidential transactions and CoinJoins.
Blockchain technology has a reputation for being transparent and accessible to all, but this is changed when you use privacy coins. If you use non-privacy digital currencies, the record of transactions and public addresses are all seen. On the other hand, using privacy coins will keep your transaction records completely private no matter how many you make or where you receive or send them to.
When investing in privacy coins, future investors usually take the time to learn more about them first before actually buying. Those who eventually buy privacy coins like Monero or Beam end up with a great addition to their portfolio because it’s unlike other mainstream digital currencies like Bitcoin or Ethereum.
You might also be wondering if privacy coins are legal, what with the never-ending issues between regulators and crypto platforms. The answer is yes, privacy coins are legal but this depends on your location. For example, the use and possession of privacy coins in South Korea and Japan are not allowed. So, be sure to learn the local regulations first before trading.
Privacy coins: The technology behind it
The ingenious idea behind privacy coins would not be possible without several strategies used to put the technology together. There are three main types that make up privacy coins, and these are the following:
Ring Confidential Transactions
Also called RingCT, Ring Confidential Transactions are used by privacy coins to encrypt the information of the sender and receiver. When transactions are made, only the two parties can access the public keys and the amount that was transferred from one place to another.
CoinJoin
Another strategy that privacy coins use is CoinJoin where numerous crypto transactions are mixed together so they won’t be tracked easily. As a result, it’ll be difficult to trace which address sent how many coins to whom, making transacting more private.
Stealth Addresses
To further support the untraceable characteristics of privacy coins, stealth addresses are also used. This means that a new crypto wallet address is made every time you make a transaction. It can be a bit tedious considering the data changes often, but it ensures that your funds are safe and secure.
The advantages of using privacy coins
Though often scrutinized by regulators, privacy coins offer loads of advantages for those who decide to invest. Take a look at some of these benefits in the section below:
One of the first and most important advantages that come with privacy coins is anonymity. This means that even your public addresses are encrypted, as long as your wallet or account is transacting with a privacy coin. Once taken or received from another account, you are free to do whatever you want with it anonymously.
Keep in mind that the only record that will be kept on the blockchain is when the transaction takes place. For example, if you decide to convert your Dogecoin crypto into Monero, then a permanent record of the transaction will be kept in the blockchain, but anything you do after that with Monero will be anonymous.
Untraceable transactions are also another advantage that comes with using privacy coins. Using it keeps your financial activities private from banks and central authorities.
These advantages are appealing for those who wish to keep all of their records off public blockchains and away from regulators. If you prefer to have full control over your funds and not risk anyone tracking or accessing them, then privacy coins are for you.
The top privacy coins in the market
Now that you know all about privacy coins and what they have to offer, you can check out the list of the best privacy coins out there. See the list below to learn more:
Monero (XMR)
First released in April 2014, Monero is the most popular privacy coin in the market and continues to hold its reputation. As of now, it has a price of $221.79 and has a market cap of $4.05 billion. You can get your hands on Monero in almost any major cryptocurrency exchange such as Binance, OKX and Huobi Global and can use it as a mode of payment as well.
Dash (DASH)
DASH is another privacy coin that is quite popular. It was first released in January 2014 and currently holds the 79th rank in all cryptocurrencies today with a current price of $141.65 and a market cap of $1.49 billion. With its feature that lets you choose whether you want to make your transactions completely private or not, Dash is a great entry point to those who want to try privacy coins.
Verge (XVG)
Verge was first launched in 2014, during the same year as other privacy coins and is currently ranking #189 on the CoinMarketCap charts today. It has a market cap of $228.58 million and a current price of $0.01384. One of its most noteworthy features is that it easily lets users send funds to stealth addresses.
Similar to DASH and Monero, you can also get your hands on Verge on select crypto trading platforms like HitBTC and Gate.io and use them as a mode of payment for online products or services.
Add privacy coins to your investment portfolio today!
Privacy coins are a must-try if you are looking for complete anonymity in the cryptosphere. Untraceable transactions are something that most traders prefer, and this unique type of digital currency will not disappoint.
Once they invest in privacy coins, future traders can expect a seamless and completely secure experience. The only way to truly find out if it’s the best fit for you is to add it to your investment portfolio and give it a whirl! Learn more about specific privacy coins and all things crypto here at Cryptoshimbun.