The fact that Bitcoin and other Cryptocurrencies are built on a public ledger Blockchain has made the transactions carried on their Blockchain open to public scrutiny.
While it is possible to transact with Bitcoin without revealing the dealer’s identity, all such transactions are recorded on a public ledger and can be traced to the receiving wallets. This means transactions are not fully decentralized.
The quest to make up for this loophole found in Bitcoin, has led to the creation of a new type of cryptocurrency known as the privacy coins. This type of coins offer fully decentralized transactions leaving no trace of such transactions once completed. Here, both the identity of the dealers and the details of the transactions are wiped out immediately once the transaction is completed.
Given the high level of secrecy involved in the use of privacy coins, many countries today have banned its use in their countries; as promoting crimes and money laundering. With more countries now coming up to ban the privacy coins, many fear that the ban might gradually spread across the globe. Can privacy coins survive the next decade? Can investors still buy the popular privacy coins as Zcash (ZEC), Monero, Firo, Decreed Horizon, etc, using the Centralized crypto exchanges? This work has addressed these burning questions on the use of privacy coins.
What are privacy coins?
Privacy coins are Cryptocurrencies that have been built on a fully decentralized network; which makes it impossible to track both the transactions and the user’s identity. The privacy coins are often used by traders who do wish to leave any trace of their transactions afterwards. These coins are very different from Bitcoin and other cryptocurrencies that record transactions on a public ledger on the blockchain. With a privacy coin, there is no record of transactions on the blockchainfor a third party to see.
Will privacy coins survive during the next decade?
The high rate of crime committed today using privacy coins has turned many governments averse to it. These coins have been found as providing a means for sponsoring terrorism and promoting cyber theft. Hence, it is completely illegal to use them in South Korea and Japan today. Other countries such as Algeria, Egypt, Iraq, Nepal, Qatar and Tunisia, Bangladesh, Morocco, etc, have completely banned the use of Cryptocurrencies in their countries including the privacy coins.
Some countries have rather cautioned the different centralized exchanges in the region never to list the privacy coins on their platforms. With the growing proscriptions given to the privacy coins today, many now fear that these coins may not survive during the next decades.
Nevertheless, amidst the growing proscriptions on the use of privacy coins, not all countries today are opposed to it. There are some investors too who consider it as representing the true purpose of cryptocurrency.
Above all, the most important factor that could wipe out the privacy of coins is when the government achieves full regulation and centralization of crypto transactions. In this case, it will be difficult to use the privacy coins.
Twelve popular privacy Coins you need to know
- Dash (DASH)
- Monero (XMR)
- Zcash (ZEC)
- Horizon (ZEN)
- Decred (DCR)
- Oasis Network (ROSE)
- Secret (SCRT)
- Keep Network (KEEP)
- Pirate Chain (ARRR)
- Status (SNT)
- iExec (RLC)
- Firo (FIRO)
Advantages of using the privacy coins
- Offers fully decentralized transactions.
- It is almost impossible to trace transactions involving privacy coins.
- They are usually built on a strong network.
Disadvantage of using the privacy coins
- Promotes crimes and cyber theft.
- Often used in sponsoring terrorists’ activities.
- Promotes money laundering by looters.
Read more:
Privacy Coins – Will they Survive the Next Decade?
