What is a privacy coin

In recent years, with the development of network technology, incidents of personal privacy data being leaked have emerged one after another.

Because of its anonymity, Bitcoin is loved by some users who value privacy; But in the eyes of other people, Bitcoin’s anonymity is still very weak, Because of Bitcoin’s All transactions can be queried and tracked by everyone. Through data mining and marking "polluted addresses", it is still possible to find the corresponding owner behind a certain Bitcoin address.

In fact, the FBI in the United States has locked many Bitcoin addresses related to illegal activities and arrested many criminals through data mining. After the famous "Mentougou Incident" occurred, Nilsson, one of the Mentougou users and a software engineer, tracked the flow of stolen Bitcoins and finally successfully identified the criminal who had been hiding for several years.

In order to further enhance the anonymity of cryptocurrency and protect the privacy of users, a new type of Token was born - Anonymous Coin.

At present, the more famous anonymous coins that have been tested by the market for a long time include Monero (XMR, Monero), DASH (Dash) and ZCash (ZEC).

Next, let’s briefly introduce how they achieve their own anonymity that is stronger than Bitcoin’s anonymity.

1. Monero (XMR, Monero)

In terms of market value, Monero is currently the most popular anonymous currency. Monero's main methods of protecting user privacy include: 1. Protecting senders through ring transactions; 2. Protecting recipients by hiding addresses; 3. Using ring signature algorithms to hide transaction amounts.

In other words, On the blockchain browser, the transaction data of Monero is not public. No one can know what transactions your Monero has experienced before. It is also impossible to check who your Monero coins are transferred to at this moment.

It is worth mentioning that ordinary computers can also participate in Monero mining. Monero uses the CryptoNight algorithm. CPU mining is more efficient than GPU mining, so ordinary computers can also mine Monero.

2. DASH (Dash)

Dash uses a technology called "coin mixing" to enhance anonymity.

The "coin mixing" technology, simply put, is to mix coins from different sending addresses and then send them out. This cuts off the one-to-one correspondence between the sender address and the recipient address, thereby better protecting privacy; the drawback is that compared to Monero, the transaction amount of Dash can be queried.

3. ZCash (ZEC, Zcash)

Zcash uses Zk-SNARKs, or Zero-knowledge proof, one A proof system that can verify a transaction without knowing the transaction itself.

Zero-knowledge proof was rated as one of the "Top 10 Global Breakthrough Technologies in 2018" by "MIT Technology Review". Vernacular Blockchain specifically wrote "The price has reached more than 40,000 How to achieve anonymous transactions with anonymous coins? " is introduced and will not be repeated here.

Famous anonymous coins, in addition to Monero (XMR, Monero), DASH (Dash) and ZCash (ZEC, ZCash) introduced above, there are also rising stars, front-end Grin and Beam are very popular at this time.

LitecoinFounder Qiwei Li said: “Fungibility is the only sound currency property that Bitcoin and Litecoin lack. Now that the scale debate is behind us, Next The battleground will be fungibility and privacy." In other words, As a pioneer of new Bitcoin technologies, Litecoin will also enhance user privacy protection in the future.

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