What Are Privacy Coins?
Privacy coins are cryptocurrencies designed to obscure transaction details like sender, receiver, and amount. They use cryptographic techniques, such as zero-knowledge proofs or stealth addresses, to enhance anonymity.
Unlike Bitcoin, where the transaction ledger is public, privacy coins aim to make the blockchain data untraceable. This increased anonymity can be attractive for users seeking financial confidentiality.
Examples include Monero and Zcash.
Glossar
Stealth Addresses
Anonymity ⎊ These cryptographic constructs allow a sender to transfer funds to a recipient's public address such that only the recipient can determine the actual receiving address used for that specific transaction.
Bitcoin and Privacy
Cryptography ⎊ The core security primitive of Bitcoin relies on robust cryptographic techniques, ensuring transaction integrity and ownership verification without reliance on trusted third parties.
Privacy Coins
Asset ⎊ Privacy Coins are cryptocurrencies fundamentally designed with built-in features intended to obscure transaction details, such as amounts, senders, and receivers, from the public ledger, thereby prioritizing transactional confidentiality over radical transparency.
Privacy
Anonymity ⎊ Privacy within cryptocurrency and derivatives contexts centers on obscuring the link between transaction origins and identifiable entities, a critical distinction from traditional finance’s reliance on Know Your Customer (KYC) protocols.