In Bitcoin addresses are public, as are balances and transaction amounts. Even though Bitcoin addresses are not directly linked to the real identity of persons using them, in theory, it would indeed by possible to trace them and get to their owners.
While Bitcoin has a transparent blockchain, it offers a level of privacy that is adequate for most people. But some users are asking for greater levels of anonymity, and in this blog we will talk precisely about those cryptocurrencies that have the goal of meeting the highest standards in privacy and decentralization.
How do private cryptocurrencies work?
- They conceal addresses by means of cryptography, which results in no one being aware of your real address.
- Real transaction amounts cannot be seen on their respective blockchains.
- They hide the IP from where transactions originate (Monero will add this feature soon).
- The communication between different nodes is made via de anonymous I2P network (Monero).
These currencies aim for any of their users to be able to spend their money without anyone being able to investigate them, so it is understandable that, at the time, many individuals use these currencies to make purchases on illegal markets on the DarkNet.
However, the fact of enjoying complete privacy does not necessarily need to imply that these are currencies tailored for criminals. Bitcoin and other currencies are often attacked due to this fact; however, it is nothing but enjoying the right to anonymity we all have.
Comparison of the main private cryptocurrencies