Countries are taking an approach to either regulate or ban cryptocurrencies entirely. This has left many individuals who transact in the cryptocurrency space with the option to stop transacting or start using Privacy Coins. Privacy coins grew exponentially in popularity in 2017 with 2018 beginning to show some major leaders in the space.
What is a Privacy Crypto?
Privacy coins are based around the concept of leaving the sender and receiver anonymous. The biggest issue plaguing privacy coins is their likelihood to be used for nefarious (illegal) or suspect activity. This results in many figures in the government casting a distrustful eye on such coins. The reasoning is simple; privacy coins dominate the transactions that take place on the Dark Web. The alternative to privacy coins is transparency and transparency creates as many problems as complete privacy. Do you want every other internet user to know how much money you have in your specific wallet? If you had a Bitcoin wallet, your balance and transactions are always publicly available. With a privacy coin the transactions, the sender, the receiver, all are “hidden” from nosey eyes. The question that presents itself is privacy worth the inherent risks of misuse, and is transparency mandatory?
In no other part of the financial system is transparency required. If your neighbor wanted to see how much money you had in your wallet, do they have a right to know? Because the answer to this question is so obviously, no!, the neighbor has no right to know about your finances this brings us to question why privacy coins have been given such a negative connotation. The reason Privacy Coins are cast in a negative light are because of their current utility. When government agents raid Dark Web websites, they are noticing how privacy coins dominate the marketplaces. This gives an unfair perspective regarding privacy coins because it only highlights what is wrong with them. Complete anonymity has its inherent risks but so does complete transparency. If each individual’s bank account balance were public information, there would be many more robberies of higher net worth individuals. One’s financials should not be information the general public is entitled to. The answer to this in the blockchain world is Privacy Coins.
There are clearly major issues with every transaction being made public, including your balance. Privacy coins enabled themselves to provide their user a level of anonymity not seen in the standard crypto coin markets. This creates an issue for governments all over because it is very difficult to monitor the spending of privacy coins, and ensuring taxes are collected on them. However, individuals will always have a right in some places to a degree of privacy if so desired.
Some countries may ban privacy coins, as some have banned crypto entirely, but the majority that allow privacy coins will have users that chose to continue to purchase, send, and receive crypto anonymously. Privacy coins have many benefits that go far beyond concealing what you purchase. The privacy provided protects the user from other individuals looking to target those with the most “coin.” Cryptocurrency robbers have escalated with many high profile thefts occurring in the previous month. The risks have increased as the value of cryptocurrencies have grown, and the ease of transfer has become easier and easier. Privacy coins provide protection, a protection that is needed in a world where some chose transparency over privacy.
There are currently multiple privacy cryptos in the space, but this article will focus on some of the most dominant players and a few sleepers. The privacy cryptos include; XMR, ZCL, DASH, BTCP, XVG, and PIVX.
Monero (XMR) was launched in April of 2014, as a fork of Bytecoin. Its purpose was to create a secure untraceable currency. XMR leverages CryptoNote technology as well as Ring Signatures, Ring Confidential Transactions and Stealth Addresses. These provide multiple layers of protection and anonymity. Each layer of protection creates more privacy for the sender and receiver.
CryptoNote is an open-sourced protocol that allows for increased privacy. Most cryptocurrencies use unchanging signatures to verify transfers. CryptoNote specifically uses Ring Signature which cloaks the sender. Think of Ring Signatures as a digital signature in which a group of signers is brought to confirm a transaction forming a ring. The actual sender creates a one-time spend time, and the receiver is the only party that can detect and spend the funds based on that unique key. Since the outputs are unlinkable the recipient and sender’s privacy are guaranteed.
Ring Confidential Transactions (RCT) mask the amount of funds transferred through very unique technology. This feature became mandatory in September 2017 for added protection. It also slightly changed how XMR would be sent through the blockchain and how miners confirmed the amount being sent is the same as the funds available without having to send the original amount broken into many smaller parts. RCT coupled with stealth addresses create the highest level of privacy. The stealth address is a one-time public key; it is automatically created for the transaction to indicate that the receiver can spend the funds in a later transaction.
XMR’s extensive privacy features along with its adoption as the utility token of the Dark Web provides it the necessary foundation to be a top crypto. Allowing for seamless transferring of crypto across the world, in complete privacy for the sender and receiver is what makes it such a sought after crypto. XMR currently has a $3.4 billion market cap and a price of $217 per coin. BTC was once the coin of the Dark Web, and it was able to outgrow that bad boy image. If XMR can improve their societal image, they may be on the short list of coins being added to Coinbase in 2018. Currently, at $217 per coin and a market cap less than half it was at its peak, XMR is a fantastic option in the short and long term.
Similarly, to XMR, DASH is the other most utilized Dark Web coin. However, DASH has features that are exceptionally transparent. Unlike, XMR, where all transactions are private, DASH allows the user to determine when to use Private/Dark send or not. DASH has two main transaction features: InstantSend and Private/Dark Send. The name says it all. If you want to send something on the Dark Web or privately use “Private” or “Dark” send. The name almost makes it seem like the individual is doing something illegal before the money is sent. However, names can be misleading as each individual should have the right to privacy without every transaction being publicly searchable.
InstantSend is DASH’s transparent money transfer service, which was initially called InstantX and rebranded in 2016. InstantSend is very impressive when compared to the amount of time it takes to send most cryptocurrencies. The transactions are near instant, basically, as quickly as you can hit refresh the DASH will arrive. Their masternode network can compete with Visa’s throughput with capabilities in excess of one thousand transactions per second. InstantSend is not what put DASH on this list.
PrivateSend is what makes DASH a competitor for Top Privacy Crypto. DASH uses a coin-mixing serviced based on CoinJoin. The way this is accomplished is by using masternodes in place of a single gateway, chaining by mixing with multiple masternodes and restricting denominations to certain, easily transferable ones. DASH aimed to create a decentralized CoinJoin network within the protocol through full nodes that would handle the mixing service internal between randomly selected nodes. The main downside or critique of this private way to send is that a malicious party can create thousands of nodes and control a majority of the network leading to the centralization of user transactions, deanonymizing them. To combat this issue DASH created a centralized node, the Masternode, requiring 1000 DASH to run a masternode which also provides an incentive (dividend) for running them.
DASH has a system in place that provides dividends, lets you send anonymously or not, and a decentralized governance platform where the Masternode operators receive one vote for big decisions. XMR is better for complete anonymity, but DASH allows transparency, and anonymity with a greater market acceptance currently. DASH has a market cap of $4.3 billion and a coin value of $555; this is down from over $1100 in January. The market rebound should drive DASH, one of the most useful privacy tokens back above $1,000.
ZClassic, ZenCash, and ZCash are all privacy coins that use the fairly similar technology under the zk-SNARKS name. Of these currencies, if you are sending a message with your anonymous crypto then the King would recommend ZenCash as a short message can be added. However, ZClassic is the best option if no message is required to be sent. ZCL is a fork of ZCash intended to remove the 20 percent fee associated with the ZCash technology. The fork developers that created ZCL decided the miners should not receive a small reward because developers need additional money to evolve and advertise a project. Instead, ZCL issues the entire block reward to the miners and aims to have development funded from other sources. Therefore, to avoid a developer mining fee ZCL is a better option than ZCash.
All three of these Z-branded cryptocurrencies use zk-SNARKS to achieve privacy. Every transaction sent on their blockchain contains a string of data provided by the sender. This zero-knowledge proof also encrypted the data. The input and output values need to be equal which ensures the sender can’t generate specific strings unless they own the spending key for that address. ZCash is not known for providing 100 percent anonymity as it is still possible to analyze the blockchain and correlate information through IP addresses. However, ZCL is still the best of the ZCash options because of one very exciting February bonus.
ZCL also has a very special surprise for February. ZCL and BTC are hosting a “co-fork” where owners of ZCL and BTC all receive 1 Bitcoin Private (BTCP). Bitcoin Cash (BCH) was a fork of BTC in summer of 2017 and has since increased in value to over $1,000 per coin. ZCL is currently trading under $100 per coin after having peaked above $200 in January prior to the market correction. ZCL has a market cap of $300 million and a current coin price of $93.50 per coin. By the February 28, 2018, fork, ZCL should easily approach a $1 billion market cap. That is a 200 percent return for February per coin held. BTCP is a Bitcoin branded privacy coin. Anyone who understands branding realizes the value of the BTC name attached to it in the world of crypto. ZCL is a must own for the month of February if you have any interest in attaining BTCP, as the only alternative is to purchase BTC at a price almost 9,000 percent more. One BTCP will be provided to every holder of 1BTC, and the holders of 1 ZCL. The dividend is the same for a coin that costs over $8,000 and for a coin under $100. ZCL should see a major climb in value prior to the fork February 28, 2018.
BTCP: Bitcoin Private
Well if you want Bitcoin Private (BTCP), the BTC branded privacy coin, the only way to attain them is to own either BTC or ZCL during the February 28, fork. With ZCL priced so much lower than BTC, it is likely investors flock to ZCL as more exchanges support the fork and the awareness regarding it continues to spread. Bitcoin Cash had an epic run this year solely because of its affinity to BTC and even with BTC fixing many of the “solutions” BCH provided people are still valuing BCH at over $1,000 per coin. The brand name behind it is where a large percentage of the value exists as with the new system upgrades and recent forks BTC is much faster and cheaper to transact on. BCH should have returned to a more obsolete roll due to these upgrades, yet people continue to flock to the BTC name. Bitcoin Private should be no different.
The same privacy technology from ZClassic and ZCash will be used for BTCP. However, the major difference is the blockchain BTCP will run on and the name. BTCP will look to capitalize on the infrastructure of the BTC blockchain while also taking full advantage of the naming rights associated with being a BTC fork. By providing the same ratio of coins to BTC holders as ZCL holders, BTCP is ensuring there is a total of approximately 20 million BTCPs. With forks of BTC that do almost nothing being worth hundreds of dollars (Bitcoin Gold, Bitcoin God) a privacy coin labeled under the BTC flag should be worth far more than the lesser important forks. The King fully expects BTCP to be the most valuable fork of BTC to date. BCH has become obsolete with BTC’s upgrades, but BTC is still not private, BTCP solves that issue while capitalizing on ZCL’s privacy technology and the BTC name.
Well, this coin was everyone’s favorite to hate in late December and early January. Verge (XVG) promised to release Wraith Protocol. Wraith was supposedly able to allow the user to switch between public and private with the flick of a button on the user’s wallet. If you were in a jurisdiction requiring public transactions, send it publicly. If you were in a jurisdiction that did not care, the user has freedom of choice. However, Wraith was delayed at the last minute, and the market correction began. The worst part of this entire short story is that although XVG was late in releasing Wraith Protocol, was that they still managed to release it successfully. Yes, they were a few weeks late. If anyone knows Development Teams, they are notoriously slow and do not care at all about deadlines. This does not mean they are lazy or absent, just that they have their own rhythm and pace they like to work at.
Wraith Protocol was released but was released during the middle of the worst correction the crypto markets had seen in years. Many did not even realize Wraith was successfully released. XVG remains priced as one of the cheapest coins on Binance and with a functioning privacy feature built in may very well become one of the top rebounding coins. XVG is priced at approximately $0.055 per coin and has a market cap of $800 million. XVG is valued at almost 200 percent of ZCL but is still only 20 percent of the major privacy coins XMR and DASH.
A significant benefit for XVG is their technology. When the user initiates a transaction with the Wallet, the switch button is set to “ON” or “OFF.” In the “ON” position Wraith is activated and the private ledger is used. If you have it set to “OFF” the public ledger is used, and the transaction is transparent. Wraith gives the sender the ability to choose, that choice is a very valuable thing. With Wraith Protocol being successfully implemented during the height of the correction I expect XVG to have a bounce back better than the general market to appreciate for the fact that Wraith was quietly released.
PIVX: Private Instant Verified Transaction
PIVX Is a great privacy cryptocurrency at approximately $5.40 per coin and a market cap of $300 million. PIVX was a coin introduced in 2017 and was one of the top gainers for many real reasons. When compared to XMR it is important to note PIVX is Proof of Stake vs. Proof of Work. Proof of Stake means all rewards are paid to coin holders where Proof of Work means Miners get a large portion of the rewards.
PIVX’s block time is sixty seconds while XMR is one hundred and twenty seconds. The average time for a transaction to send for PIVX; less than one second. The average time for a transaction to send for XMR; one to two minutes. The transaction fee on average for PIVX is $.0003 while it is $3.20 for XMR. XMR generally takes a total of twenty minutes for a transaction to be confirmed while PIVX is closer to three minutes. PIVX is cheaper, faster, and implements better privacy tech than XMR the most notorious privacy coin on the market.
PIVX uses custom Zerocoin technology to accomplish its privacy features while also implementing a masternode system in the beginning of 2018. PIVX is in more of an infancy stage, similarly to XVG at market caps approximately ten percent of those with greater market adoption. Even if the technology is more advanced for the newer coins and blockchains, the respect the privacy coins that have been around for years have is unmatched. PIVX or XVG are great options for those wanting to place a wager on which established coin may have the fastest ability to break into the market cap of DASH and XMR.
Different privacy coins provide an array of unique features. The cryptocurrencies listed above are some of the most adopted by the crypto space already. There are many more privacy coins available on very select exchanges with market caps of less than fourty million, but listing them would be a very detailed process, and currently, their utility is minimized as these are the most popular by far. It is evident there is a huge demand for privacy coins. It is also very clear that branding exists in the crypto world as well. Knowing how important branding is when dictating value is very important.Therefore, the highest risk, highest reward privacy crypto would be BTCP. The only way to get your hands on BTCP is to purchase ZCL or BTC.
If you are a more medium risk investor and do not wish to wait for a fork before determining a coin’s importance both XVG and PIVX would be strong choices. XVG and PIVX should see rapid trends North as they provide seamless privacy. Although DASH and XMR are the big names in the space, BTCP is about to enter the “name” game, while PIVX and XVG have better technology supporting their privacy platforms.
Highest Risk Play: BTCP
Safe with Highest Returns: XVG and PIVX
To read the King’s prior articles, to find out which ICOs he currently recommends, or to get in contact directly with the King, you can on Twitter (@JbtheCryptoKing) or Reddit (ICO updates and Daily Reports).