Private coins crypto

Many of these coins have advantages over names like Ethereum in Bitcoin, particularly as it relates to privacy. Although the blockchain technology that coins like Bitcoin use are meant to be secure and anonymous, some coins manage to keep transactions even more private. Read on to see how some of these alternative coins achieve this level of security.

Beam is a great example, as it uses the MimbleWimble and LelantusMW protocols which operate in the world of confidential Decentralized Finance. Beam is focused primarily on security, as transactions are private by default and addresses are not stored in the blockchain. To hide the origins of transactions, it first travels among a subset of peers before it is broadcasted.

In other words, all transactions appear to be randomized to any outsiders looking in at the data. Your privacy is important Apart from the threat of hackers and government suppression, keeping your finances private is an individual right and just makes sense to most users. Sadly, blockchain transparency, while it serves to drive trust and accountability on the network, also exposes everything about a user's holdings, the value of their assets, and all deposits and withdrawals.

Traditional bank accounts are, in fact, more private than public blockchains, as they are only privy to their owners and law enforcement agencies on special occasions , giving the account owner some measure of privacy. While individuals should prioritize their privacy, financial institutions dealing in crypto can hardly stay ahead of the competition if all the details of their trades or deals are out in the open.

Transparency in blockchain robs them of any competitive advantage they may have. Therefore, the quest for "bitcoin competitors" starts when people are yearning for privacy and freedom. Who should consider privacy-maintaining blockchains Private cryptocurrency solutions are becoming increasingly popular, and different categories of individuals have embraced them recently.

Privacy and data security activists are one group that readily embraces the use of private cryptocurrencies. This is also helpful as it drives across a statement supporting private blockchain solutions focused on restoring users' control over their digital information. Whistleblowers and political activists should also adopt privacy blockchain solutions, seeing that governments will never cease to scrutinize their affairs.

Political activism, after all, requires financial support, especially under oppressive governments. Privacy blockchain solutions provide a clear path for ordinary people to support political activists without endangering their finances. The case of the Canadian truckers taught a bitter lesson to communities and associations that are politically suppressed. Traditional finance, and even Bitcoin, are too open and can be turned into weapons.

While Bitcoin encourages pseudonymity, most points in which it can be exchanged for official currencies require users to provide verifiable identity documents to use their services. Privacy solutions, on the other hand, can help politically oppressed communities raise funds and escape any form of financial backlash due to the anonymity these protocols provide.

Financial institutions in Web3 can also retain their competitive advantage and transact without being subject to scrutiny from competitors and regular individuals using privacy solutions. Luckily for all the above, there are several different ways to achieve privacy and still benefit from the permissionlessness of blockchain technology. There are majorly four different mechanisms that achieve on-chain privacy.

For example, privacy coins often have trouble with on-off ramps, miss out on some centralized exchange listings, access to the DeFi ecosystem, and so on. Similarly, other bitcoin competitors like coin mixers support only one asset type at a time and only in a determinate amount e. Method 1: Create private ways to transact private chains The most popular method through which on-chain privacy can be achieved is by creating private chains, hosting privacy coins.

Unlike public blockchain networks such as Bitcoin or Ethereum , privacy coins can offer greater transaction obscurity. Some popular examples of privacy coins are Zcash and Monero. Method 2: Private blockchain networks with private ecosystems Private blockchain transaction networks do offer on-chain privacy but miss out in terms of offering DeFi innovation, smart contracts, or an ecosystem. Public blockchain networks, on the other hand, are massively ahead in terms of offering a range of decentralized financial services such as lending, borrowing, stablecoins , etc.

An overview of privacy solutions in crypto Source This limits the use of privacy coins to simple transactions, making them less attractive in comparison. Solutions such as Secret Network , Oasis Labs , Zether , and others attempt to solve this by creating ecosystems that enable default privacy. Offering private DeFi services is a massive leap forward in innovation when it comes to leveraging blockchain technology.

DeFi services are a serious contender to Bitcoin since Bitcoin misses out on smart contract capabilities, thus lacking a DeFi ecosystem. Something can be said, however, about the way private smart contract blockchains create siloed ecosystems.

The most popular blockchains, albeit public, have created thriving environments which these solutions try to take users away from, creating a zero-sum game in the opinion of some. Method 3: Utilizing mixers Yet another way of achieving on-chain privacy on public blockchain networks such as Bitcoin is to use coin mixers.

Coin mixers or tumblers allow you to make untraceable transactions while keeping your dealings away from the public eye, preserving your identity and obscuring sensitive information on the transactions you have made. However, just like the past bitcoin competitors, they also have their disadvantages. Coin mixers have their own set of limitations and pose some unique challenges.

For example, most crypto mixing services also operate in legal obscurity and might get you in trouble if your jurisdiction introduces a law against them and applies it retrospectively. Additionally, some of the models used by coin mixers can be bypassed with the help of blockchain forensics and analytics firms. Method 4: Find a way to infuse existing systems with privacy The most innovative and user-friendly way to achieve privacy without reinventing the wheel could be to infuse existing systems with privacy.

This is where Panther comes into the picture, providing an on-chain privacy solution that fits right along with existing DeFi applications. Panther Protocol: Interoperable privacy for DeFi Panther Protocol seeks to restore privacy and trust across different blockchain networks. The solution creates a level playing field for individuals and institutions alike, helping them foray into decentralized finance while eliminating privacy concerns.

Panther utilizes zero-knowledge proofs with zkSNARK technology, which allows users to present genuine transaction proofs while keeping sensitive details confidential. Panther also adopts a multi-asset shielding feature that breaks the on-chain trail as users deposit their assets into a pool and mint collateralized zAssets , which allows them to transact privately.

Unlike most privacy solutions, Panther Protocol is not limited to a particular blockchain network. Panther uniquely offers cross-chain solutions with a privacy toggle, allowing users to deposit their favorite cryptocurrencies, mint the corresponding zAssets, and transact across different blockchains. Regarding compliance, Panther Protocol balances the equation with zero-knowledge reports that allow users to share data with trusted third-party providers, thus preserving their privacy and remaining compliant with existing regulations.

On one hand, Bitcoin is the foundation of the crypto economy and the most valuable asset, keeping its crown as a market leader. Competing cryptocurrencies, private or not, on the other hand, aim to offer additional features and some advantages over Bitcoin, but are unlikely to ever take its current place. In essence, there are no confirmed winners and losers since the crypto economy is still in a nascent stage.

However, we may not discard the fact that Bitcoin believers might not consider these features necessary in the first place. It seems like we will have to wait and see whether the market starts putting a higher emphasis on Layer-1 transaction privacy to make a final decision.

About Panther Panther is a decentralized protocol that enables interoperable privacy in DeFi using zero-knowledge proofs.

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