Several factors can go into someone’s choice when investing in cryptocurrency. Among the most important considerations that a new investor can make are the coin’s accessibility, price history, total and circulating supply, and the level of activity that they can expect with fellow traders. But what about privacy? How much weight should you assign to the factor of privacy when choosing a cryptocurrency to trade in?
Seasoned crypto traders will tell you that not all currencies are created equal, and this is especially evident when it comes to the issue of privacy. Bitcoin (BTC), which is the world’s most popularly traded cryptocurrency and currently the biggest in terms of market capitalization, requires that all BTC transactions be traceable and stored on its proprietary network. That means that anyone will be able to see the balances and amounts involved in any BTC transaction. By this logic, true privacy and anonymity are most attainable when a BTC trader uses multiple addresses per transaction or designates multiple wallets for different transaction types—which is a hassle that some don’t want to go through.
In contrast, there are other cryptocurrencies out there that may have more extensive privacy features than the world’s best-known coins. They can offer extra layers of security for each transaction, thus giving a trader some peace of mind about obscuring their financial information from bad actors.
For new crypto traders, here’s a list of today’s top privacy coins. You may want to consider these over coins if privacy, security, and anonymity are among your non-negotiables for a journey in crypto trading.
Among the coins in this list, Monero (XMR) has one of the most promising futures. Though its market cap of $4.9 billion seems modest compared to those of crypto giants like Bitcoin and Ethereum (BTC), Monero currently has the third-largest developer pool after these two. Monero’s ring signature anonymization scheme, RingCT technology for obscuring amounts involved in XMR transactions, and Stealth Address system for generating automatic one-time addresses make this coin a truly untraceable one. If you’re interested in Monero, do your research about this coin’s mining potential and adaptive blockchain and find the best Monero wallet to store your XMR coins. For the latter, XMRWallet.com is an excellent option for the security and control it will afford you over your XMR coins and keys.
Another privacy coin option that you may want to consider is Zcash, or ZEC. Though ZEC is based on BTC’s codebase and shares BTC’s fixed supply of 21 million units, it promises enhanced security features compared to its more popular counterpart. The privacy feature that makes Zcash a compelling option is its Zero-Knowledge Proof cryptographic tool, which gives traders the option to shield their addresses from one another and also obfuscates the transaction amount involved. If you desire a low-key trading experience, you can check out Zcash.
In 2018, the ZenCash coin was rebranded as Horizen while still retaining its ticker abbreviation ZEN. Horizen continues its parent brand’s advocacy for decentralized transactions and communications while introducing new traders to a greater variety of privacy-based applications. This coin boasts a large node network, which contributes to users’ anonymity, and it also allows traders to shield their Z-addresses (fully private address) and T-addresses (transparent address). It must be noted, however, that funds sent from a Z-address to a T-address will disclose the amount received by the latter.
Verge (XVG) began as DogeCoinDark, a DogeCoin fork that promised anonymity its predecessor didn’t have. Today, the multi-algorithm privacy coin has appeared on the radar for its use of existing technologies like The Onion Router (Tor) open-sourced software and the Invisible Internet Project (I2P) to keep traders’ information private. XVG also positions itself as an everyday payments tool. Thus, for crypto users who want both simplicity and privacy out of their trading experience, XVG is an appealing choice.
Last on this lineup is Beam (BEAM). Though BEAM has yet to soar as high as other coins on this list, this MimbleWimble and LelantusMW-driven cryptocurrency has nonetheless been gathering steam among traders. Beam’s developers aim to achieve full scalability as well as privacy for this coin, thus addressing two common crypto problems like security and blockchain bloating. Unlike other coins which offer privacy as an option, Beam makes every transaction private by default and stores no private information at all on its blockchain. If BEAM rises higher on the crypto charts, you may want to consider investing in it.
The Bottom Line
The world of cryptocurrency has matured quite a lot since its initial boom in the 2000s. More traders are thinking carefully about what they want out of their coins. This generation of traders is also less willing to jump on the bandwagon for the most popular cryptocurrencies, just because these coins have the best brand recall.
Privacy is a feature that will draw more traders into the ecosystem of a particular cryptocurrency. That’s why it’s worth paying special attention to when deciding which crypto coin is a viable investment. Consider any of these five coins when you start trading in crypto, especially if your privacy matters a lot to you.