Although most people consider all cryptocurrency transactions anonymous, this is not the case. Bitcoin, for example, has all transactions recorded in a public book, which can be easily audited.
In theory and in practice, it is entirely possible to associate a Bitcoin address with an individual, especially if he has already used a cryptocurrency exchange, which requires identity verification (KYC).
However, the apparent need for completely anonymous payment options has led to the creation of crypto called privacy coins.
During this week, many of them recorded gains, and it may be better to pay close attention.
What are privacy coins?
Privacy coins, or privacy coins, hide all information from the sender and recipient.
They do not provide data on the value of the transaction and, ultimately, leave absolutely no trace or record.
With that said, many people consider that privacy coins are generally used by criminals, since transactions are not traceable.
A valid example here may come from the kidnapping of a Norwegian billionaire's wife last year.
The authors allegedly asked for a $ 10 million ransom to be paid in one of the most popular private currencies – Monero.
However, a report for the second quarter of 2019 indicates the opposite. He examines the involvement of cryptocurrencies in illegal activities and concludes that privacy currencies are responsible for only about 4% of all similar transactions.
A more popular use is the basic need for most ordinary people to protect their anonymity from central authorities and governments. This is where the demand for these currencies comes in, first.
Notable privacy coins
Monero is one of the most popular at the moment. It is also one of the largest cryptocurrencies, as it currently ranks 13th. In addition, it has received much widespread adoption with many different outlets.
Dash is another important example of such a currency, which is based on Bitcoin software. It continues to grow over the years and recently partnered with Burger King Venezuela.
Dash will be accepted at 40 different locations, where people can use it to buy hamburgers, for example. Its price reacted accordingly and rose more than 80% in one day.
However, the Dash team claims to be focused on building a “user-centric currency with a privacy feature in a wallet, not a privacy currency”.
Zcash falls into the category of privacy coins. The company is behind the Zk-SNARK protocol. In addition, it was also approved by the famous Edward Snowden.
Other examples of privacy currencies are Horizen (ZEN), Komodo (KMD), Verge (XVG), Bytecoin (BCN), Zcoin (XZC), PIVX (PIVX) and more.
Naturally, one cannot ignore the price of a particular currency, especially if it considers taking advantage of its potential as an investment, instead of transmitting payments.
When looking at all the charts, it is possible to get some general and conclusive information about how all privacy currencies were handling different trends.
For example, during the parabolic price increase of late 2017 and early 2018, everyone reached their highest level ever (just like most cryptocurrencies at the time).
Monero (XMR) reached almost $ 500, while Dash reached $ 1,642 in December 2017.
Then came the price drop, and they all followed closely. For reference only, XMR saw a 92% decline to $ 42 at the end of 2018, while the DASH drop was 96% to $ 63.
Is the bullish trend back?
Despite the price drops of 2018, most of them appear to be on an extremely positive trend in recent weeks.
XMR saw a 10% increase in the previous seven days. Zcash posted gains of 66% and Zcoin rose 60% in the same period.
Dash managed to increase 140% to about $ 125. In addition, DASH entered the top 10 currencies by market value at one point, but has since retracted.
These moves have made the cryptographic community speculate on whether privacy coins are returning to the main scene or not.
They played a significant role during the previous big cycle, and some see their latest increases as an indication that another is coming.
Although it is too early to conclude that this theory is valid, it is still worth checking the possibility that it might actually occur soon.
Although all privacy currencies have declined in the past few days, the swings have been noticeable and it is interesting to see if 2020 will be positive in this regard.