Top 5 Cryptocurrency Privacy Coins

Privacy and anonymity has always been one of the primary attractions of cryptocurrency. Some digital tokens offer more privacy than others. You may want to consider the privacy features of several coins before you decide to make an investment. Here are the top five cryptocurrency privacy coins that you can obtain right now.

5 Deep Onion

TOR, or The Onion Router, is nothing new to fans of cryptocurrency. Perhaps the first and most notorious market for Bitcoin purchases, the Silk Road, was hosted on what has become known as the Dark Web. It shouldn’t be too surprising, then, that cryptocurrencies are being specifically developed with TOR in mind. Deep Onion is one of those.

The Deep Onion project is a new privacy coin project that is using the TOR network to make transactions untraceable. The coin operates on a blockchain that uses both a Proof of Work and a Proof of Stake model. The result is that transactions can be processed very fast.

Another privacy feature of this digital coin is that it uses so-called stealth addresses. A cryptocurrency wallet is basically a web address which can be associated with transfers of digital currency. The standard is that a cryptocurrency user has a send address and a receive address which do not change. Deep Onion offers the possibility to send with a one-time address. Those receiving the coins have their address obfuscated through a process that involves sending a block to a unique address. This makes it possible for someone to receive cryptocurrency without revealing their actual wallet address.

Other privacy features are being developed by the Deep Onion team. These include features called Deep Send and Deep Vault. The features will allow for permanent, private storage of documents on the blockchain, and they will also introduce multiple signatures that help to prevent the tracing of payments.

While some will obviously shy away from Deep Onion because of its connection to TOR, it seems like an attractive option for those who want to spend cryptocurrency without worrying about who is spying on their transactions.

4 Dash

Some may find the presence of Dash on this list to be somewhat questionable. After all, the coin was created in the wake of a Bitcoin fork in 2014, and Bitcoin has proven that it isn’t as anonymous as people once believed. The fact that Dash functions similarly to Bitcoin and offers many of the same features could make some question its privacy.

But, there are some notable differences. For starters, Dash makes it possible to make instant, private transactions. The Proof of Stake protocol used by Dash is what enables a greater level of privacy and security.

Masternodes are used to create a second tier of structure. This tier is where instant private transactions can take place. Only those who have 1,000 or more coins in their wallet are allowed to run a masternode.

On the second tier of the Dash blockchain, private transactions can be confirmed instantly. CoinJoin is a protocol that groups transactions together to create a joint payment. This protocol is what allows private transfers. It is virtually impossible for a third-party to determine the origin or destination of Dash transfers that have been made with CoinJoin.

3 CloakCoin

Another altcoin that is opting for an onion approach is CloakCoin. The idea has been around for about four years, but Cloak is only now beginning to emerge among the large number of altcoins that have flooded the market. The hallmarks of this platform are quick processing times and privacy protocols that make it very hard to determine who is behind a transaction.

This Proof of Stake coin has a couple of different methods that can be used to obfuscate transactions. The first of these is the onion routing method which uses multiple layers of encryption. This is how the protocol gets its name. Deciphering the transactions is like peeling back the skin of an onion. The multiple layers render discovery impossible.

The Enigma process, something we’ll speak more about in the next addition to our list, is a method of cloaking transactions on a network by shuffling them in with random data. It’s like looking for a needle in a haystack. A user can request that their CloakCoin transactions be carried out with the Enigma protocol in play. It should be noted that this protocol is not to be confused with the actual Enigma project.

2 Enigma

The Enigma cryptocurrency project is not the same as the cloaking method that is used with CloakCoin.  In fact, Enigma is not actually a coin but rather a method of privacy that can be used on existing blockchains for added privacy. Therefore, it merits inclusion on this list.

However, Enigma does have a token which is designated as ENG on cryptocurrency exchanges. This token takes full advantage of the Enigma protocols to offer its owners increased privacy. Nodes on the Enigma network are unable to actually “see” the data that they are processing. They can complete the verification needed to process a block, but they do not have the ability to see the data.

What Enigma wants to ultimately do is take the idea of Ethereum’s Smart Contracts a step further by developing Secret Contracts. In a Secret Contract, the data is always kept encrypted. It is never made available for viewing by those who operate a node.

Furthermore, the only individuals who can run a node for Enigma must purchase the Enigma token. Those who have purchased tokens can be rewarded for the work they do in processing transactions. A deposit is required before a block of data can be processed. Any errors that are made during the processing constitute the forfeit of the deposit which is then distributed to other nodes who did not make errors.

It would not be surprising to see other blockchains enable the Enigma protocol in the near future. It certainly has the capacity to restore the concept of privacy to cryptocurrency.

1 Monero

We admit that Monero garners the top spot on the list of privacy coins in part because it is recognizable to most investors. Monero has steadily gained interest from investors since it was launched in 2014. It is consistently one of the most traded altcoins on the popular cryptocurrency exchanges, and a lot of that has to do with its stability and privacy features.

Like Dash, Monero emerged out of a Bitcoin fork. And like Dash, Monero implemented additional privacy features that make it a little more attractive to hold than Bitcoin. Chiefly, it is possible for individuals to preserve the anonymity of transactions on the Monero blockchain. There are a couple of different features which make this possible.

Ring signatures are created when a group of signers combine to sign each transaction. There are usually a minimum of five signers to every transaction. The presence of multiple signers makes it impossible to link a Monero user with a specific transaction. This means that transactions become practically untraceable.

Stealth addresses are also used by Monero which function outside of the blockchain. These one-time addresses allow the user and receiver to participate in a transaction without revealing their own wallet addresses. Most transactions are passed through a number of these stealth addresses to further enhance anonymity. Those who used Bitcoin tumblers in the past will find that stealth addresses work in much the same manner.

Complete anonymity and privacy is becoming harder and harder to achieve in the digital age. These top five cryptocurrency privacy coins are a step in the right direction for those who value their right to make digital token transactions without scrutiny.

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