The discussion surrounding privacy oriented coins is not slowing down anytime soon. These coins ensure that user activities are not only hidden from the public eye but also untraceable. Governments are aware of privacy-focused coins and to be frank, most of them do not like this idea at all. Cryptocurrency exchanges in Japan have been delisting privacy coins in order to avoid conflict with the regulatory body in the country, the Financial Services Agency (FSA).
The number of anonymous coins continues to increase in the cryptocurrency industry. Users are slowly becoming aware that most blockchains leave their transactions and details online to be viewed by any interested party. However, some people would rather have these details away from the public not because they are running illegal activities but they feel safe knowing that no one is tracking their operations. It is unfortunate that anonymous coins first became a preferred option for criminals. The situation tainted not only privacy coins but also other cryptocurrencies like Bitcoin (BTC). The crypto industry is slowly but steadily redeeming itself from this criminal notion.
Anonymous coins like Monero (XMR) cryptographically hide the number of coins that a user sent, received or owns. They are untraceable and cannot be linked by using transaction history via the blockchain. They also ensure fungibility by making sure that all the coins are of the same value and are mutually interchangeable. In addition to that, they are decentralized in a way that all the nodes on the protocol have equal powers as well as control and no authority single-handedly creates the currency. Other privacy-focused coins in the industry include Dash (DASH), Zcash (ZEC), and Verge (XVG) among others.
Monero is said to be cryptographically anonymous by default. This is because it utilizes various privacy features. Significantly, stealth address and the ring confidential transactions (RingCT) are top on the list of the features that make Monero private.
On the Monero protocol a user can receive payments via a single address. However, the blockchain ensures that links between the user’s address and other people addresses are non-existent. This complex process employs what is known as stealth addresses. In this case, a random one-time address is automatically developed for every transaction done by the sender. This means that all the payments sent to a user are directed to unique addresses on the protocol. In the end, there are no links to other addresses on the blockchain and the recipient remains masked from public scrutiny.
Ring Signatures come in handy in a situation where the recipient of the coins moves the funds. Ring Signatures mask all the outputs on Monero blockchain ensuring untraceability to the original sender. The outputs are grouped in other transactions on the protocol, this obfuscates the transactions that are being sent and in turn creating a situation of plausible deniability.
Ring Confidential Transactions (RingCT)
This technology was introduced by Monero (XMR) in January of last year. It was an improvement of the ring signatures. The new improved version included confidential transactions that cryptographically hide the amount of funds being sent but at the same time, verifying the transaction amount. The details of the transaction remain concealed. Read more on ring confidential transactions (RingCT) here.
At the time of writing Monero is trading at $135.84 following a 12.75% jump in the last 24 hours. XMR/USD recently traded below $100.00 but found a support at $80.00 before the bulls entered. Monero (XMR) is currently testing $140 but supported at $120 and $95.00.