Bitcoin remains the most popular cryptocurrency in the crypto market.
Check out this link for a guide on how to buy BTC in Nigeria using the Naira quickly and safely.
But there are many more coins out there that serve a different purpose and can be more useful in other scenarios. Such is the case of Privacy Coins.
Privacy has been one of the main topics since the start of the 21st century. We live in a surveilled society where unknown government agencies monitor our every move and transaction from not only our nation but also by powerful countries with the capacity to control the entire internet.
Indeed, privacy is one of the drivers of cryptocurrencies and has its origin in the Cypherpunk movement of the early nineties. The idea of preserving privacy at an economic level. This led to the creation of Bitcoin Mixers, which expanded to other altcoins like Ethereum. Also, this philosophy of internet privacy is what is behind the creation of privacy coins.
Read more about Bitcoin Mixers and how they work.
As the world of information continues to develop in Nigeria, compromises in privacy will have to be made. Yet, thanks to the world of Blockchain, economic transactions can remain private for individuals.
What are Privacy Coins?
In the very early days of Bitcoin, it was assumed that transactions of a Blockchain were anonymous. The identity of the wallet was derived from the public key, so even if all transactions were visible, it was assumed a wallet could not be connected to the person behind it. Of course, this didn’t last.
The demise of Silk Road, an illegal market place in the dark web, was brought about by law enforcement unmasking some BTC transactions. This new ability ended the myth of Bitcoin being an anonymous way to send money and left many in the space with the open question of who might be monitoring the Blockchain.
Events like this gave rise to the privacy coins. These are cryptocurrencies that hide the origin and the sender for each transaction that has gone through their network. Unlike general crypto coins, privacy coins hide these traces by default and do not need an extra layer of Cryptocurrency Mixers to make economic activity anonymous.
Yet, they use the same principle. Like with Mixers, a privacy coin aggregates a lot of transactions and addresses. It mixes them all up to hide the origin of the individual transactions. This process is what gives privacy coins a higher degree of anonymity in the world of Blockchain. It is not perfect as there are some papers out there that discuss the possibility of trace the money flows of even a privacy coin. But these are very resource-intensive processes that require the attention of some very powerful agencies.
So, in general, a privacy coin is way more anonymous than a regular cryptocurrency. Privacy coins have carved a niche market use and a level of popularity among the crypto community. In no particular order, the most popular privacy coins are:
Monero is one of the original privacy coins in the space. To date, it is the biggest privacy coin in the market right now, with a market cap of 1.5 billion dollars. Monero is a Proof of Work network that is also ASIC resistant. This means that it cannot be mined using ASIC to prevent centralization by those with deep pockets enough to buy these expensive machines.
All transactions in Monero are private by default. A Monero Blockchain Explorer will only show that a transaction was a success, only the sender and the receiver know the amount transacted. These features have made Monero the king of privacy coins.
As the top privacy coin in the world, Monero has gained a strong foothold in Nigeria. It is the most traded privacy coin in the country, and many times it is used instead of Bitcoin. This is because the Monero network fees are lower than in BTC, so it is more economically viable to send money using XRM than Bitcoin.
Click on the link to safely and quickly buy Monero either to trade or for investment.
Zcoin was developed on a protocol named Sigma, which is used to maintain the privacy of transactions. Much like with Monero, the ledger only shows that a particular transaction was a success. Only the parties involved in the money flow can see the amounts sent and received.
The ZCoin network has integrated Tor, so all the users’ IP addresses are also protected when using this platform.
The Zcoin is considerably smaller than other privacy coins. It has a market cap of 80 million at the time of this writing. The total supply for Zcoins is 21,400,000.
The Grin coin is a unique project. Like the two before on the list, the Grin network does not store amounts sent and receive for each transaction. This ensures the privacy of the parties involved remains intact.
Additionally, Grin uses Mimblewimble. This is technology named after the spell in the Harry Potter books allows for transaction history to be erased. This not only increases privacy but also helps the network’s TPS to scale with demand. The market cap of Grin at the time of writing was almost 30 million dollars.
Super Zero (SERO)
This is not only a privacy coin, but the native token of the SERO protocol. The project markets itself as the first platform that allows the deployment of Dapps using a privacy coin. The smart contracts launched on SERO can use the coin and deploy anonymous tokens. The SERO protocol achieves this by implementing a version of zk-SNARKs named Super-SNARK. It not only ensures privacy but also increases transaction speeds.
Up to this point, the crypto coins listed are private by default. There are a few networks out there that give the option of hiding transactions. Such as:
A fork of the Bitcoin Network Dash was launched in 2014. The cryptocurrency offers the possibility to make transactions anonymous by implementing a native mixing service in the Dash network. This option has made it a popular choice for Venezuelans to send money back home, and it has solidified Dash’s use as one of the best privacy coins. Also, as one of the most successful forks of the Bitcoin Network to date.
Dash is also a favorite of Nigerians. As the fees of Bitcoin and Ethereum rise due to the increase in price, Dash has emerged a viable and affordable alternative. This is especially so when sending remittances to the country, as the lower fees and faster confirmation time of the Dash network make it an attractive choice. This has created a growing community of Dash users in Nigeria that is expanding by the day.
As we can see, the privacy coin niche is alive and well. These cryptocurrencies see a lot of traffic regularly and are being actively improved by developers’ passionate community. They bring financial services to the oppressed population and ensure that no matter what happens in the future, privacy will be maintained in an ever more surveilled world.
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On March 25, 2021, Techpoint Africa will be hosting the brightest minds in decentralised finance/crypto at the Digital Currency Summit tagged “Building the money of the future” Click here for more details, registration and sponsorship. Location: Fourpoint by Sheraton, V.I. Lagos.