Introduction to privacy-focused cryptocurrencies

The goal of privacy-centric cryptocurrencies is to further enhance anonymity in places where traditional cryptocurrencies, like Bitcoin, have failed. Everything concerning transaction-builders and recipients is out in the open on the blockchain; traceable, too. It's just that which privacy coins look to get around: keeping the financial info of the user safe by anonymizing the sender and receiver identities along with the amount being transacted.

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Monero

Monero is a popular, privacy-oriented cryptocurrency; ring signature, stealth address, and Confidential Transaction are advanced cryptographic techniques that mix up the details of a transaction with others so it is tough to link transactions with specific users. Similarly, Zcash offers various features for privacy with the help of zero-knowledge proofs, popularly known as zk-SNARKszero-knowledge Succinct Non-interactive Arguments of Knowledge, wherein one is able to verify the transactions without revealing any sensitive piece of information.

Dash

Another example is Dash, which has an optional privacy feature called PrivateSend. The latter makes use of techniques of coin mixing in order to make tracing of the source of funds difficult. Other projects, such as Grin and Beam, have implemented the MimbleWimble protocol; it minimizes data storage on the blockchain and improves one's privacy.

Some consider that they provide fundamental financial privacy, which is basically necessary to maintain the fungibility of digital currencies. Others attack them because regulators think they could be misused for illegitimate activities. Their future will be further shaped through ongoing changes in both technological and legal landscapes concerning privacy and regulation.

~ Regards,

VEIGO (Community Mod)