There’s still a surprising number of people who believe that Bitcoin is anonymous. This is not true, and in fact thanks to the cryptocurrency’s immutable ledger it’s quite easy to trace these transactions. Yes, there’s an active movement within government agencies are working on tracking transactions which passes through the Bitcoin network, possibly connecting them to each individual’s identities. This capability has obviously caused concerns for many cryptocurrency enthusiasts.
As a result, alternative currencies dubbed “privacy coins” have begun to gather quite a significant clout in the past year or so (many saw the prices climbed into the stratosphere within a short time) – as they address the ongoing need for users to maintain anonymous transactions. Indeed, to the dismay of many regulators and law enforcers, many users of the underground forums and marketplaces have resorted to using Monero, amongst others. This frustration has led many regulators to ban exchanges from trading in privacy coins – such as Monero.
So, what do the proponents of the privacy coin movement have to say?
Security from theft
Many cryptocurrencies will actually allow you to see the entire balance of a person’s wallet just by having the address! This is obviously not desirable, and many users of traditional currencies use multiple wallets to address this. However, most good privacy coins will allow you to utilize stealth addresses so you can send payments without revealing the balance of your wallet or needing any kind of complicated work around. This can keep you from being a target for theft.
Private, network verified transactions
Privacy coins allow for network “trust” to be carried out – while securing transactions. No one has to know who received what. This is especially useful for government and even businesses to prevent espionage. The point is, even if you use a different wallet address, it’s still possible for people to figure out what you have and where that money is going. There are numerous social engineering scams going on where people piece together information from various sources to gain access to accounts, and with enough work they could still learn real addresses, making anyone a potential target (for espionage or otherwise).
Faster and cheaper transactions
Many private coins are actively working on becoming not only a faster but also cheaper alternative to currencies like Bitcoin or Ethereum. This could make them far more convenient for buying and selling goods in the future. For example, a Monero transaction will confirm in around one-third of the amount of time a Bitcoin transaction would take. If you’ve ever waited around for hours to receive a Bitcoin transaction, then you’ll recognize how valuable this is.
Because there’s nothing wrong with wanting privacy
While some will say that users who have nothing to hide don’t need privacy coins, that’s not true at all. There’s nothing wrong with wanting to transact with others privately. If you are a privacy advocate, using private cryptocurrencies is a great way to fight against corporations and governments constantly harvesting our data without permission.
Cover photo by: cryptonewsasia
Experienced in the technology and blockchain startups ecosystem, Benjamin honed his skills in the growth and operational development of many organizations. An huge fan of blockchain technology and its applications, he spends his time both investing and advising into blockchain projects and scalable development.