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In an age with a gazillion different cryptocurrencies, most of them belonging to projects with lofty goals and unknown founders and most of them probably not likely to make it over the long term there is still hope for some.
I don't like cryptocurrencies that inflate without end, I'm not a maximalist but without true utility and a real purpose creating underlying value, I simply don't see the point investing in them.
But, looking back at the past, Bitcoin seems to be one of the best out there and many flocked to it for its privacy features... Nowadays bitcoin isn't private at all and maybe it never was to begin with but then again, just a few years ago very few people had even heard about Bitcoin or had any idea about what it was. I remember hearing about it myself and I even looked into buying it before it had received much attention but after researching what it was, how I would go about buying it and how someone is required to keep a long string of code which was essentially a password and ownership key while trusting that this digital store of value would simply exist and remain in the cloud was a bit too much to accept at the time. Big mistake!
In 2017 cryptocurrencies received some major attention in the form of mass media coverage and corporate adoption and although many people may not know this yet but the total market cap grew from under 50 billion to over 500 billion USD in just the scope of a year!
Some are even saying that this may even be the single-greatest year for an asset class that history has ever seen. But what has contributed to the amazing growth of the cryptospace and why have I decided to dedicate this article to exploring a small niche within the larger industry, the importance of privacy cryptocurrencies?
Well in regard to the first part of my question, the rally in virtual currencies can be attributed to two major trends: the adoption of decentralized digital currencies "coins" accepted as a viable store of value and monetary exchange and the overall support of blockchain technology as a new paradigm for money transmittance.
I use some big words here so maybe it would be useful to simplify these thoughts and boil it down a bit more. Basically what I'm saying is that blockchain technology is so appealing because it can be used to create a digital currency that is completely in control of the masses while at the same time eliminating the need for a middleman.
The middleman I'm referring to is an entity like a bank. Many believe banks are the cause of endless wars and suffering and humanity would be much better off without them. This opinion aligns with my own philosophy and is supported by the knowledge I've gained studying modern history.
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So now that I've discussed what cryptocurrencies are and why they have gained so much attention in the past few years, it's time to move on to the major focus of this article, privacy coins.
Well, many would argue that all cryptocurrencies should have some degree of privacy. And for the most part cryptocurrencies are designed with security and privacy in mind. For example, the majority of blockchains are decentralized, which means that there no main data center that cybercriminals can break into to hold a cryptocurrency hostage.
The majority of transactions conducted on blockchains are encrypted and they occur almost instantaneously across the globe 24 hours a day, seven days a week.
Now, people should know that when it comes to privacy, not all cryptocurrencies are built equally. Privacy coins have been around for a long time, some of the most famous being Monero and Dash (although I'd argue that Dash isn't very private at all after looking into it a bit more). There are also several other lesser known privacy coins that I'd like to make people aware of in this article. People are starting to catch on that privacy is going to be very important in this new and emerging futuristic world driven by cryptocurrency transactions. Crypto is for the most part in direct competition with the currencies created by governments around the world.
Recently, a major celebrity in the cryptospace, MGT Investment's CEO John McAfee, the man who founded the company that created McAfee antivirus software in the 1980s and 1990s, has become a major supporter of privacy coins.
The privacy-coin trend takes the idea of bitcoin one step further in the sense that virtual coins can not just be the primary means of buying goods and services, but they also can provide anonymity and privacy in the way they handle transactions.
One of the bigger misconceptions associated with bitcoin is that its transactions are completely anonymous. While it's true that you can transact with bitcoin without having to provide your Social Security number or bank account, there's still data on the digital ledger that could potentially be linked back to you.
For instance, the Internal Revenue Service recently won a court case against cryptocurrency exchange Coinbase requiring it to hand over information on more than 14,300 users who'd exchanged more than $20,000 worth of bitcoin between 2013 and 2015. While the move was made so the IRS could possibly go after capital-gain tax evaders, the bigger theme here is that these transactions aren't as anonymous as they appear.
So, what can be learned from this situation is that Bitcoin is not a private currency and if you are in the business of handling cryptocurrencies, be aware that governments not only have the desire to monitor your activities but they have the ability to follow them to a certain extent.
Privacy coins are the evolution of the movement bitcoin helped create. They are developed to do what Bitcoin does while protecting your financial information from going public.
However, this article would be biased if I didn't also point out that privacy coins also represent a desirable financial instrument for cybercriminals to conduct their nefarious activities. This may be true but privacy-coin advocates are quick to point out that the number of illegitimate users is very small, and the benefits they present to legitimate users are nothing short of incredible.
Now, lets talk about specific privacy coins so you can get a basic understanding of the current playing field. The most popular privacy coin is Monero. Its gained a lot of traction and is currently the 11th-largest cryptocurrency by market cap, at nearly $5 billion.
Monero runs an open-sourced protocol known as CryptoNote, which is its primary source of anonymity. Most cryptocurrencies use an unchanging signature when verifying transactions, whereas Monero's CryptoNote uses ring signatures, which is similar to a joint bank account with multiple signers, but with the actual signer remaining unknown.
Monero is a solid privacy coin with a lot of room to grow in terms of market cap in my opinion. If governments start to crack down on cryptocurrencies, expect a lot of people to run to high ground. Expect them to trade up for Monero.
Another extremely popular privacy coin is Verge. I've known about this coin for quite some time and to be honest, like many others I wish I practiced the ancient art of HODL with this one but enough with the regrets...
Verge is possibly the best-performing cryptocurrency in the entire space. Between Dec. 31, 2016 and Dec. 23, 2017, Verge's coin (XVG) increased in value by more than 1,500,000%! This number still completely shocks and amazes me, doesn't everybody wish they were the lucky guy or gal that put 10,000 USD on this in Dec. of 2016 and simply forgotten about it?
Verge's secret sauce is that it relies on Tor and I2P networks in order to make IP addresses untraceable. Further, its Simple Payment Verification technology ensures transaction settlement in around five seconds, which is far and away better than many of its peers. With a number of secure mobile wallets already being offered, including the Tor Android Wallet, it's clearly a name (and coin) that's making a lot of noise.
I've looked into the technology behind Verge (XVG) and it is nothing short of amazing. Although they have a small development team they really know their stuff! I'd also imagine their development team has grown exponentially with their price so I'd expect this coin to be around for a very long time!
A few other privacy coins that are definitely worthy of mention include Dash, PIVX, Hush, Zcash, and Xios. All of these are worth loading up on as the possibility of government crackdowns on cryptocurrencies is very possible to say the least.
Now it seems prudent to mention the fact that even though the popularity of cryptocurrencies has increased exponentially in 2017 along with their prices, in 2018 there is still a lot to be desired. There are way more cryptocurrencies then there have ever been in the past. Most will not make it. The few that do better provide some real underlying value. Privacy is value, plain and simple. Coins like Zcash and Monero have a place in this world! Of course we must be cautious as all new and emerging markets present a very high level of risk and volatility to investors.
This market faces many threats which include but are not limited to government regulations restricting or even banning cryptocurrencies, market manipulation by media and large corporations and many other threats I've yet to speak of or even imagine.
We are at a stage in market maturity where choices will need to be made. What do we value in a cryptocurrency? What features do you want? Are we simply speculating or are we changing the world here?
Please leave your thoughts and feedback below!
Thanks for reading.
Authored by @techblogger
In-text citations source: Meet the Newest Cryptocurrency Trend: Privacy Coins - The Motley Fool
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So I read and if I didn't misunderstand, @techblogger, in most of the crypto currencies, for example the Bitcoin, the addresses are public, as well as the balances and the amount of the transactions. Although Bitcoin addresses are not directly linked to the real identity of the users who use them, in theory it would be possible to track them and reach their owner, as is the case with Steem. The amount of coins we have is information that anyone can have by getting into the profile of each user and that information can be used for any wrongdoing. That's really worrisome and half scary! From there, I guess, many investors ask for more privacy and anonymity when making transactions. According to what you say, one of the coins that meets this requirement is Monedero, which meets that aspiration of anonymity. We must make it clear that when we refer to anonymity, it is the possibility of untraceable transactions, where the person making the cryptographic movements does not necessarily give their personal data.
Every day I learn more from you, @techblogger! Someday I'll become an expert in crypto currencies, in the meantime I'll keep reading to you. Hahahaha. Greetings to you and the @adsactly team.
Correct @nancybriti. Steem and Bitcoin are not good examples of private cryptocurrencies. Zcash and Monero are the best examples that exist today. There will be many more budding up as the globalists continue to strangle the masses and close the confines of the invisible prison that has been established. Privacy and freedom go hand and hand. Sure people argue that privacy is dangerous from terrorists and what not. But i've got to ask, who are the true terrorists to begin with? Happy you're interested in this.
The concept of Monero is completely contrary to the requirements for the legalization of cryptocurrency, as a new financial instrument. In addition, because Monero is a danger, namely, complete anonymity is the key to illegal funding of potentially dangerous organizations, lack of accountability does not allow controlling the flow of funds and lastly, the system of work, including encryption of the data chain, completely contradicts the principles of security.
It turns out that the integration of Monero at the state level is completely excluded. In addition, the cryptocurrency is a potential danger as a tool for financing terrorism, which means that it will first of all attract the attention of regulators. Getting government action against Monero is probably only a matter of time. In order to create any attempts to limit the vital activity of the system, powers are needed leading to the need for complete legal regulation of the field of cryptocurrencies. In any case, efforts are being made to integrate a new financial instrument throughout the world.
It seems to me that the following scenario is quite possible in the future. Cryptocurrencies that are set up to cooperate with the government will receive a certain degree of legitimization, and Monero will become, as it were, an underground tool for payments.
Your points are valid but you are forgetting to mention the counter argument which revolves around privacy. How do you buy things and ensure your privacy is intact well for the most part people use cash. But it is a known fact that superpowers are set on removing cash from the equation. Without cash they have more control. Control is key when you operate a global economy of smoke a mirrors and print money endlessly without having a true underlying value backing it. Cryptocurrencies that allow users to remain completely private are vital to freedom. This point cannot be ignored!
I'd contend that BTC remains quite private, but at least two of the exchanges that are big enough to deal in BTC are US based and the EXCHANGES were required to give up the information.
One of the beauties of the 'smaller' coins is that an exchange with a very limited assets can trade them, and in a more anonymous manner.
The thing that really irked me about the Coinbase deal was there was no warning. The IRS has a really ferocious hold on companies that are chartered in the US and Coinbase really had no choice in the matter.
One thing it did do was standardize the way Crypto profits are reported and taxed in the US. Now we know the rules of engagement.
Thanks for a great article, I have a lot to think about.
BTC is still very private but people with the right connections can track you mate. Don't think you've got complete anon freedom. Privacy is going to be a key point going forward and there are sure to be opportunities to invest if you follow the tech! I'm going to put my money where my mouth is and back some the best and brightest projects working on this.
Actually I am just still yet to understand what this Cryptocurrency of a thing is all about. With the price always going up and down lately going down. I feel really discouraged now. I guess this is not how it is or maybe I still need to really learn a lot about this Cryptocurrency stuff of a thing. I just hope the situation presently turns around
I know it can be challenging trying to get your head around the market at first. The bottom line is that cryptos have seen such exponential growth the past few years that they really need some time to cool down. Consolidation is necessary. Many cryptos will merge or simply die. What comes out of the ashes will be the cryptoverse 2.0. Wait, watch, learn. Price is important but it isn't the whole story, follow the technology and the utility provides that is the key to making money with cryptocurrency. You need to spot the future before it becomes the future and you need to act. That is the secret formula right there. Let me know if you have any questions or need examples of this.
I thank you very much for your sustained information, @techblogger, of great interest, especially for people who are completely ignorant in the complex technological and financial world of crypto currencies. His post illustrates very well the conveniences or advantages of the so-called "private crypto currencies", but also their risks. I will be attentive to the texts you share here, thanks to @adsactly. Greetings.
Sure, happy to shed light on the greater world of cryptocurrencies. Lets hope there are many green days ahead for the whole industry!
Sincerely @techblogger you have done justice to the world of cryptocurrency to novice of which i am part of. I have been finding it difficult over the period i have been on steemit to Understand what it entails and what way i can invest in it in other to be successful either now or later. With this post i am aslo able to learn that their are other crypto apart from steemit.
Although you didn't advice much on steem you focused on other crypto other than our own. I think i will really appreciate it, if you shade more light on steem in the crypto world.
Thank you
Thanks for the kind words. There is definitely a lot to be learned. Take things one step at a time advancing your understanding and skills in this field. You will benefit in numerous ways. Steem itself is a great cryptocurrency albeit one of many out there. Each of the biggest cryptos have distinct benefits that set them apart. Holding the ones you feel most strongly about is a good way to diversify.
The subject of crypto coins is a subject that's on the table. At present there are many crypto coins, but I have only heard about crypto coins such as Bitcoin and Dash that have similar characteristics, although in my country I have known that instant and private transactions have been made in some trading sites only with the latter. Before it was a topic that was silenced, but now most people know about coins and blockchain. So far it seems that having crypto currencies is a business, although, like any business, it carries its risks by the ups and downs that happen and influence the investments for good or for bad as the case may be. I think it will take some time for them to be accepted, but this will change the world. Thanks to Steemit we are familiar with SBD and Steem as fiat currencies. Thanks to @techblogger for the interesting publication and @adsactly for sharing it.
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