Perhaps you’ve heard about the TornadoCash developer’s arrest? or are interested in learning more about cryptocurrencies centered around privacy?
We list four well-known privacy cryptocurrencies that can help you maintain your online privacy.
What is Monero?
Monero is a layer-one privacy coin with the highest market capitalization. Like Bitcoin, it operates on a proof-of-work (PoW) model and lacks smart contract functionalities. Because it uses ring signatures for probabilistic privacy, your transaction is categorized alongside those of other transactions. With enough branching paths, tracking should eventually become impossible.
What is ZCash?
ZCash is the strongest layer-one for cryptographic assurances. It uses a PoW UTXO-based proof of work model but also lacks smart contracts. It conceals transactional information using zero-knowledge proofs. The transaction itself is not published to the blockchain; just the proof is.
Although it depends on a trusted setup, Zcash Foundation has proposed Halo, which might do away with the need for a trusted setup requirement, that is required for a greater privacy guarantee.
What is SCRT?
Secret – SCRT is a first layer-one smart contract platform that tackles privacy. They use trusted execution environments, currently Intel SGX, to do privacy-preserving computations over encrypted data.
Each validator node stores the consensus seed within SGX. Rust is used to create secret smart contracts. The whole privacy aspect rests on the that Intel SGX will remain a secure enclave indefinitely.
What is Aztec?
Aztec is an Ethereum layer-two rollup that creates unique zk-circuits for DeFi privacy. Tokens are deposited onto layer-2, and their centralized sequencer manages private Uniswap transactions as well as ERC20 mixing. You receive a note that lets you withdraw onto a new unlinked mainnet address. This isvery promising technology.
What was Tornado Cash?
An ethereum smart contract mixer called Tornado Cash allowed users to make fixed-amount deposits and withdrawals (0.1, 1, 10, 100 ETH). Where you created a *offchain message* when you deposit and you could use this message to subsequently withdraw to a separate message. In this way probabilistic privacy was offered.
To prevent statistical leaks, users had to take care not to reveal things like linked timestamps, amount groupings, IP addresses, etc. The source of a withdrawal is obvious if there has only been a single contribution into the 100 ETH pool and a withdraw of 100 ETH not much later.
Conclusion
Cryptocurrency is at a crossroads; it could either move in the direction of a global CBDC surveillance state with *stricter* surveillance & censorship OR it could develop into a truly private financial system where users can choose to share different levels of transaction information. The future will tell because cryptography advancements will come quickly.
