The cryptocurrency community characterizes certain cryptocurrencies like Monero and Zcash as a ‘privacy coin.” Nevertheless, the reasons for desiring privacy aren’t dubious or malicious.
As a matter of fact, token privacy and untraceability are significant functions for financial systems and currencies. It adds to a token’s fungibility — the ability for any individual to accept any token — since the token’s history cannot be traced.
Cryptocurrencies like Monero and Litecoin are growing to become more prevalent as such altcoins are increasingly advantageous, they hold benefits like being able to process transactions quicker and with a particular level of reliability. More importantly, they sustain the notion of anonymity well.
Nevertheless, hackers and cybercriminals have employed cryptocurrencies to carry out illicit financial transactions while simultaneously concealing their identities.
Hackers are aware of the fact that cryptocurrency is designed for individuals seeking pseudonymity (For instance, hiding who is sending/receiving the funds) and that it isn’t always easy to precisely identify the user/owner of cryptocurrency accounts.
Sophisticated threat actors have utilized cryptocurrencies to establish their attack infrastructure and conceal their identities. In the past, cryptocurrency hackers have compromised exchanges and stolen millions of cryptocurrencies.
It’s unsurprising to hear that modern ransomware operators demand ransoms to be paid via cryptocurrencies and ultimately making a large profit.
Private cryptocurrencies are also popular on the dark web since they supply an advantageous technique of obscuring identities and transaction information.
Law enforcement agencies conduct complex investigations using sophisticated cryptocurrency forensic analysis tools in efforts to identify cybercriminals.
In this article, we’ll examine the top 18 privacy coins for cryptocurrency hackers.
Monero is a privacy coin which is a cryptocurrency geared towards transaction privacy.
Privacy coins may be deployed to stealthily send money wherever, whenever.
Monero’s total circulating supply is fixed at marginally over eighteen million (18.4) units.
In spite of such a low supply, the price of every coin is slightly more than seventy dollars ($73).
Bitcoin (BTC) vs. Monero (XMR)
The Bitcoin (BTC) network is not an entirely anonymous network. The data for every transaction is saved on the blockchain and is visible to members of the public. Anyone is able to utilize blockchain explorers to analyze a crypto transaction.
The transaction data, coupled with the Bitcoin address, may be deployed to monitor transactions. Every Bitcoin address may be potentially associated with an individual or an entity, and
In contrast, Monero (XMR) holds a mixture of features that render it the most private cryptocurrency at this moment. Monero was designed to have complete anonymity. The Monero network employs ring signatures to carry out transaction mixing.
A ring structure links a transaction to an address. Nevertheless, as opposed to separately linking each trade to a unique entity, the ring address links a considerable amount of traders to a single ring signature. Hence, members of the ring trade without disclosing which one among them was behind the transaction.
Once a Monero transaction is produced, the protocol automatically mixes the sender’s transaction with additional spendable transaction inputs on the network.
The volume of mixed inputs, also known as ‘mixin level’,
If an individual looks at the Monero blockchain, any one of these inputs may be the actual sender’s input. Monero deploys ring signatures one step ahead by way of RingCT (Ring Confidential Transactions).
RingCT conceals the quantity of XMR in every transaction by employing a range proof mathematical function to the transaction.
In the current system, the network and public spectators of the blockchain may validate the validity of XMR transferred. Nevertheless, merely the sender and receiver can perceive the actual amount of XMR transferred. In this matter, the RingCT implementation of ring signatures renders transactions on Monero untraceable.
Stealth addresses permit users to make a unique address for one-time use. Such address may not be traced back to the individual behind the transaction. Simply put, transactions on the Monero network are made using unique single-time use stealth addresses geared towards obscuring the destination of a transaction.
For example, John sends 13 XMR to Steve’s public wallet address. Once John generates the transaction in his wallet, the Monero protocol will proceed to automatically produce a one-time stealth address (Serves as an anonymous middleman address) to send the 13 XMR to.
At this stage, the 13 XMR inside the stealth wallet address may be accessible via Bob’s wallet private spend key.
Notably, John and Steve’s wallet addresses are never directly associated with this transaction. Thus, we can observe how stealth addresses supply unlinkability between the sender and receiver.
Kovri serves as Monero’s implementation of I2P (Invisible Internet Project), an open-source network layer that permits for censorship-resistant Internet usage by way of routing traffic using volunteer nodes around the globe.
Kovri is geared towards encrypting your Monero traffic and routing it using I2P nodes. By utilizing Kovri, your IP address may not be associated with your Monero transactions, hence supplying an even larger extent of privacy.
Moreover, each transaction on the Monero network is private by default. Hence, the absence of opt-in is the most significant benefit of Monero.
Bear in mind that stealth addresses and RingCT supply plausible deniability to the sender and receiver.
In addition, wallet transaction details and quantities have not been transparent on the public blockchain, which denotes that XMR may not be tainted or discriminated against on the basis of their prior transaction history. Such unique privacy properties render Monero a sincerely fungible cryptocurrency.
As of May 29, 2020, Monero ranks at #15 on the list of cryptocurrencies with a $1.83 billion market cap.
2. Zcash (ZEC)
Zcash (ZEC) represents a fork of the Bitcoin protocol with the inclusion of a privacy layer by means of a cryptographic proof called zk-SNARKs. The acronym zk-SNARK refers to “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.”
Utilizing zk-SHARKs, Zcash may verify blockchain transactions without disclosing origins, destinations, and quantities transferred.
Notably, zk-SHARKs permit a ‘prover’ to prove to a ‘verifier’ a statement’s authenticity without disclosing any particular information regarding the statement apart from the authenticity of the statement.
In contrast to Monero, Zcash addresses are either private (z-addresses) or transparent (t-addresses).
Transparent wallet addresses begin with ‘t‘, whereas private wallet addresses begin with ‘z‘.
Given that fungibility requires no knowledge of prior financial history, merely transactions between two private addresses may be deemed fungible.
Bear in mind that moving ZEC from a transparent address to a private address may be deployed as a ‘shielding’ technique to fundamentally remove the financial history of ZEC concerned.
This indicates that ZEC may become fungible after it has been transferred to a private wallet. Hence, Zcash may be perceived as a semi-fungible cryptocurrency.
As of May 29, 2020, Zcash ranks at #26 on the list of cryptocurrencies with a $441 million market cap.
Similar to Monero, Zcash did not possess an Initial Coin Offering (ICO) or pre-mine. Rather, the Zcash’s founders created a for-profit corporation named Zerocoin Electric Coin Company and managed to obtain $1 million of startup funding from private investors.
The investors of Zcash can recoup their investment by relying partially on Zcash’s founders reward which allocates 20% of the mining rewards to its founders over four years.
Given that Zcash is developed by a for-profit corporation, this particular cryptocurrency has received substantial criticism for this consolidated corporate structure.
Keep in mind that Zcash is a fork of Bitcoin, yet employs a distinct PoW consensus algorithm named Equihash.
3. Dash (DASH)
Dash is a cryptocurrency that deploys a system of masternodes and CoinJoin to supply privacy features for its consumers.
Similar to Zcash, Dash provides both transparent and private transactions. A private transaction technique named PrivateSend has been made possible through the enforcement of CoinJoin.
CoinJoin is a trustless technique that merges or blends numerous Bitcoin transactions into a sole transaction for the purpose of obfuscating the precise transaction flow of every individual transaction.
Despite the fact that CoinJoin has been implemented into various services and wallets, however, the more commonly known implementation is JoinMarket which is geared towards enhancing the privacy and fungibility of bitcoin transactions.
JoinMarket operates by establishing a new sort of market that permits users the ability to transact as part of a CoinJoin transaction.
DASH asserts to be decentralized, though its enforcement of CoinJoin is perceived by critics not to be extremely decentralized at all.
Bear in mind that masternodes process PrivateSend transactions occurring on the DASH network. A masternode refers to a server that stakes or freezes a specific amount of coins, carries out accounting and additional functions, and acquires a remuneration for its services.
With DASH, masternodes ought to stake 1,000 DASH each and acquire 45% of the block reward. With the current model, the input and output information of PrivateSend transactions are recorded by masternodes.
In the event that an entity possesses the capability to restrain or secretly monitor a segment of DASH’s masternodes, it would be quite feasible to reverse engineer the transactions of PrivateSend to disclose origin and destination information.
Considering that PrivateSend is an implementation of CoinJoin, it needs liquidity and demand to mix efficiently and privately.
Following several consumer complaints regarding the sluggishness of PrivateSend transactions, the DASH community proceeded to vote to disburse five liquidity providers to produce liquidity for mixing services.
Although this has increased the speed of PrivateSend transactions, it has additionally resulted in conjecture regarding feasible complicity between the five providers.
Thus, we can come to the conclusion that privacy on the DASH network is reliant on a couple of masternodes and mixing liquidity providers.
Similar to Zcash, DASH contains optional privacy. Consequently, DASH is merely fungible when deploying the PrivateSend feature.
In the event that PrivateSend is disabled, transactions are entirely transparent on the blockchain and the related DASH coins are not fungible.
While DASH is a decentralized cryptocurrency, the decentralization of its privacy hallmarks does not match Monero and Zcash, which the pair have privacy implemented at the protocol level.
DASH’s masternode and mixing liquidity provider paradigm places privacy hallmarks on a second tier that is more susceptible to centralization.
As of May 29, 2020, Dash ranks at #22 on the list of cryptocurrencies with a $716 million market cap.
4. Verge (XVG)
The majority of private cryptocurrencies count on cryptographic methods to secure the user’s privacy.
To hide a user’s identity, Verge (XVG) leverages two core technologies – Tor and I2P. Tor transmits a user’s communications across a distributed network of nodes and tunnels run by volunteers located across the world.
I2P encrypts the user’s data before sending it through an anonymous, peer-to-peer, globally distributed network.
Verge utilizes these technologies jointly to make sure that no one knows where a transaction originates.
To elucidate, Verge employs an open ledger to verify transactions. Nevertheless, there lacks a connection between the transaction record to any IP addresses or additional identifying information.
As of May 29, 2020, Verge ranks at #84 on the list of cryptocurrencies with a $67 million market cap.
5. Komodo (KMD)
Komodo (KMD) represents a hard fork of ZCash and zk-SNARK protocol. For this reason, Komodo shares numerous resemblances to ZEC, including zero-knowledge proofs.
Nevertheless, Komodo has further developed the ZEC foundation, implementing privacy-focused enhancements like buying new currencies through the Komodo blockchain and decentralized exchange while staying anonymous, or dissociating the connection between a user’s coins and transactions prior to shifting them on.
Komodo employs Delayed Proof-of-Work (dPoW) which secures transactions and is essentially an altered version of the Proof of Work (PoW) consensus algorithm that utilizes Bitcoin blockchain’s hashpower.
The Komodo platform is powered by Atomic Swap Technology which permits consumers to exchange any cryptocurrency connected to Komodo’s decentralized exchange (BarterDEX) using peer-to-peer transactions.
As of May 29, 2020, Komodo ranks at #81 on the list of cryptocurrencies with a $71 million market cap.
6. Bitcoin Private (BTCP)
Bitcoin Private (BTCP) generated as a result of a unique ‘fork-merge’ of two well-known cryptocurrencies — Bitcoin (BTC) and ZClassic (ZCL).
BTCP merges the security of Bitcoin and privacy hallmarks of ZCL, which happens to be a fork of ZCash (ZEC).
Moreover, BTCP increases the blocksize to permit marginally quicker network than regular BTC.
As of May 29, 2020, Bitcoin Private ranks at #1074 on the list of cryptocurrencies with a $566,281 market cap.
7. Zcoin (XZC)
Zcoin is an anonymous cryptocurrency that utilizes the Zerocoin protocol. Such protocol is perceived as a prevailing cryptographic method for anonymous transactions.
XZC was one of the initial cryptocurrencies to utilize zero-knowledge proofs that assist a user in demonstrating they hold information without revealing what the information is.
Hence, the Zerocoin protocol plays an important role in ensuring that users preserve their anonymity during financial transactions.
When a user transacts with Zcoin’s Zerocoin feature, none of their transaction histories are connected to the actual coins and solely the receiver and sender are aware that the user have in fact exchanged funds.
In contrast, when a user transact utilizing Bitcoin (BTC) or Ethereum (ETH), their transaction history is continuously connected to their coins by default which renders them vulnerable.
Zcoin seeks to deliver full fungibility and privacy to its users in conjunction with obliterating miner’s centralization through the implementation of an enhanced proof of work algorithm named MTP which renders it feasible to mine XZC with GPUs and CPUs.
As of May 29, 2020, Zcoin ranks at #103 on the list of cryptocurrencies with a $47 million market cap.
8. Horizen (ZEN) previously ZenCash
Horizen (ZEN) is forked from Zcash which deploys the zk-SNARK protocol to provide users anonymity during financial transactions.
The Horizen network comprises a decentralized autonomous organization (Decentralized Autonomous Organization, aka DAO), ZenHide (Endpoint Masking), ZenChat (Private Messenger), and ZenPub (Anonymous Publishing Platform).
Similar to Zcash, ZEN has minimum dedicated RAM requirements to dispatch a shielded transaction.
Currently, the minimum RAM requirement is 3.2GB when deployed on a 64-bit processor with a 64-bit operating system.
Zcash addresses are either T-Addresses or Z-Addresses.
T-Addresses are ordinary addresses for making transactions, much like Bitcoin. Such transactions are public and transparent on the blockchain.
Z-Addresses are also referred to as shielded addresses. Transactions between Z-Addresses are entirely private and anonymous. They utilize the zero-knowledge protocol to conceal sender and recipient addresses, including the amount sent.
ZEN represents the native cryptocurrency coin employed by the Horizen network.
As of May 29, 2020, Horizen ranks at #93 on the list of cryptocurrencies with a $55 million market cap.
9. NavCoin (NAV)
NavCoin (NAV) is another cryptocurrency geared towards being anonymous and being easy to operate.
NAV applies a secondary sub-chain referred to as NavTech. With NavTech, NAV permits users to stay anonymous during transactions.
The NavTech subchain includes several servers and layers of encryption passing the transaction around. Subsequently, NavTech transmits the last payment to the recipient from a token pool that the NavTech contract handles.
Every NAV token is equitably treasured and holds no known history.
The initial tokens from the sender are not identical to the tokens the recipient acquires.
The stratified encryption and mixing in a handled token pool is NavCoin’s privacy approach. It aims to ensure that no individual may follow a NavTech transaction to its last destination.
NAV is considering to continually implement additional features such as bogus transactions and dummy accounts that increase the dissemination of NAV through the NavTech subchain, which would further obscure the trail of actual transactions.
Note that Monero, Zcash, and Dash have all exceeded NavCoin with regards to adoption and financing. Nonetheless, NAV seeks to render it straightforward and quick to employ private transactions.
As of May 29, 2020, NavCoin ranks at #410 on the list of cryptocurrencies with an $7.84 million market cap.
10. Sumokoin (SUMO)
Sumokoin (SUMO) is a cryptocurrency that was developed with a considerable degree of privacy in mind.
SUMO utilizes Ring Confidential Transactions (RingCT) technology with minimum ringsize of 49 (48 mixings) to obscure sources/amounts transferred, making it highly resistant to blockchain analysis.
SUMO is untraceable as transactions on the SUMO blockchain may not be connected to a specific user or real-world identity. Hence, the sources and amounts transferred are obscured by default.
The distributed consensus is utilized when confirming transactions, which is subsequently recorded on the blockchain.
Sumokoin is a fungible coin since it has already incorporated privacy features. It is highly improbable that the SUMO coin would be blacklisted by any party due to its association in past transactions.
As of May 29, 2020, Sumokoin ranks at #802 on the list of cryptocurrencies with a $1.59 million market cap.
11. PIVX (PIVX)
PIVX (PIVX) is a private coin forked from Dash. PIVX deploys a Proof of Stake (PoS) consensus system algorithm permitting every owner of PIVX to partake in acquiring block rewards while securing the network with full node wallets.
PIVX has put into operation a protocol named Zerocoin with numerous benefits for users such as permitting anonymity in blockchain-level transactions when it comes to unlinkability.
Zerocoin PIV (zPIV) (PIV is a unit of PIVX) supplies a protocol-level coin mixing service utilizing zero-knowledge proofs to separate the connection between the sender and the receiver with 100% anonymity and untraceability.
In other words, every coin that gets sent utilizing zPIV is now at present 100% fungible since it holds no definable history connected to them.
Employing zPIV can be useful since it also entails that the user’s balance may be concealed to avoid being targeted by hackers and cybercriminals.
PIVX masternodes requires users to dedicate at least 10,000 coins to the network. SwiftX technology permits PIVX to be employed for point of sale (POS) instances where a locked payment is sent and confirmed five times in less than a second, while not being open to double spends that other coins are vulnerable to.
Bear in mind that PIVX zPIV accumulators are encrypted using RSA-2048 challenge generated keys which nullifies necessity for a developer trusted setup and indicates that no individual is aware of the factors. This signifies that the privacy of users are assured through the deployment of zPIV.
As of May 29, 2020, PIVX ranks at #175 on the list of cryptocurrencies with a $17.61 million market cap.
12. Bytecoin (BCN)
Bytecoin (BCN) is a private, decentralized cryptocurrency that deploys CryptoNote protocol to maintain anonymity.
Such protocol comprises a combination of one-time stealth addresses and ring signatures to retain the privacy of every transactions.
Linking transactions are impracticable due to BCN supplying users with several one-time addresses stemming from the user’s public key.
As of May 29, 2020, Bytecoin ranks at #241 on the list of cryptocurrencies with a $45.63 million market cap.
13. Spectrecoin (XSPEC)
What makes Spectrecoin (XSPEC) fascinating and useful is its use of energy-efficient Proof-of-Stake algorithms that supplies quick transaction confirmations.
To achieve anonymity, XSPEC generates random one-time addresses for each transaction on behalf of the recipient.
Additionally, XSPEC employs ring signatures. Thus, every private transaction is apparently signed by one user out of a randomly picked group of users. Thereby, there is no chance to establish who precisely submitted the signature.
XSPEC employs the Proof-of-Stake (PoSv3) consensus when confirming transactions.
Furthermore, XSPEC runs as a Tor hidden service, concealing the user’s IP address by routing traffic through various hops on the Tor network. OBFS4 masks Tor usage as regular internet traffic, assisting users in countries where Tor usage is blocked.
As of May 29, 2020, Spectrecoin ranks at #664 on the list of cryptocurrencies with a $2.61 million market cap.
14. DeepOnion (ONION)
DeepOnion (ONION) is a private cryptocurrency that is highly concentrated on achieving and preserving the user’s anonymity.
To achieve anonymity, every transaction is conducted through the Tor network, which masks the user’s IP address. With DeepOnion, no cryptographic encryption or mixing pools are deployed. Rather, a random wallet concealed behind the Tor network will send your payment without leaving a trail. These features do not merely supply a high degree of secrecy but also nullifies the ability to trace payments.
ONION possesses another feature which is a hybrid, incorporation of both Proof-of-Work and Proof-of-Stake; hash algorithm – X13;
Furthermore, ONION employs a public key obfuscation protocol called OBSF4 to encrypt a message’s contents going through the protocol.
The DeepOnion project also includes additional technologies such as DeepSend which supplies anonymous and non-tracked transactions through the deployment of multi-signatures and DeepVault which permits the user to store information securely in the DeepOnion blockchain (The ability to alter it is entirely omitted.)
As of May 29, 2020, DeepOnion ranks at #969 on the list of cryptocurrencies with an $834,804 market cap.
15. Xeonbit (XNB)
Xeonbit (XNB) is a Cryptonote algorithm based cryptocurrency that utilizes ring signatures to shuffle the public keys of users to remove the potential of identifying a specific user.
Nevertheless, the payments continue to be anonymous by default, since every transaction deploys several cryptographic signatures controlling various outputs to mix with the outputs of the sender.
Additionally, XNB permits for traceable transfers. XNB protects a receiver from defining their balance via inspection of incoming messages to the public address of the user.
16. Veil (VEIL)
Veil (VEIL) is another privacy coin that utilizes a Proof of Stake (PoS) consensus algorithm and deploys unique technologies like ring signatures and ring confidential transactions (RingCT) to obscure every detail related to transactions.
In addition, VEIL deploys a custom version of the Zerocoin protocol.
In contrast to Ethereum (ETH) and Monero (XMR), the eminence of Veil in the conventional mining world is comparatively new.
The algorithm X16R is noteworthy considering that it brings a distinct approach than the aforementioned algorithms, to ASIC resistance.
As of May 29, 2020, Veil ranks at #884 on the list of cryptocurrencies with a $1.41 million market cap.
17. Incognito (PRV)
The Incognito project is not a private token. Nevertheless, it is a decentralized platform for any token to evolve into its own private token. This signifies that users don’t have to purchase Monero, Zcash, or PRV to carry out private financial transactions.
Users may just switch on “Incognito mode” for their existing tokens. PRV serves as Incognito’s native utility token which sustains the network and rewards based on the substantiation of private transactions.
Anyone who owns PRV may assist in constructing the network, and in exchange, possess a portion of its income.
18. Enigma (ENG)
Bear in mind that Enigma (ENG) is neither a cryptocurrency or a blockchain. Rather, it is a privacy protocol that may be utilized on blockchains and decentralized applications.
Significantly, the Enigma network supplies privacy by enabling nodes to be incapable of perceiving the data they calculate.
In spite of the fact that the nodes are not able to precisely perceive what they are working on, such nodes can still verify that their calculations have been run properly.
As of May 29, 2020, Enigma ranks at #153 on the list of cryptocurrencies with a $23.26 million market cap.
Even though Bitcoin persists as the most popular cryptocurrency in the cryptocurrency community and on the dark web, it is continuously being monitored and the transactions of users are being traced with sophisticated commercial tools.
Privacy coins can make it harder for entities to track transaction details and identify users. Thus, anyone who values anonymity would likely perceive private cryptocurrencies as beneficial.
It’s evident that cryptocurrency hackers use many methods to steal Bitcoin from unsuspecting users.