Best Anonymous Cryptocurrencies in 2021
The idea behind cryptocurrencies is to return control of their own money to the users themselves. Decentralized and anonymous, digital currencies have destroyed the monopoly of banks. In 2021, two people can complete a financial transaction without the involvement of any regulatory body.
They interact directly with each other, while their identities remain unknown.
However, all transactions are recorded on the blockchain and tracked. If desired, you can track any transaction with a crypt. But there are systems where this is more difficult, and sometimes almost impossible.
Today we will talk about anonymous cryptocurrencies, touch on the topic of pseudo-anonymity and highlight the top of the most anonymous cryptocoins that exist today.
What is the essence of anonymous cryptocurrencies
Anonymous cryptocurrencies are needed by everyone who values online privacy. Confidentiality and speed of financial transactions are important for business. Ordinary users strive to ensure privacy.
The first anonymous cryptocurrency Bytecoin appeared in 2012.
The anonymity of many digital currencies has come under heavy criticism. All "thanks" to the efforts of financial regulators who are actively promoting AML / KYC requirements. The openness of the blockchain means that special services, hackers and even ordinary users can trace any transaction and figure out the identity of the holder of digital coins.
Therefore, many developers realized the need to create truly anonymous cryptocurrencies that would provide users with maximum privacy.
Anonymous cryptocurrencies are peer-to-peer (peer-to-peer, decentralized) systems that are a unit of settlement within a network.
A high level of confidentiality is achieved through the use of cryptographic protocols that make it difficult or completely impossible to trace transactions on the blockchain.
What is cryptocurrency pseudo-anonymity?
This may be news to many, but Bitcoin has never been a truly private cryptocurrency. Any BTC address can be linked to an IP address and other information using analytical services such as CipherTrace, Chainalysis or Crystal.
The transaction history of the largest cryptocurrency systems is freely available, and any user can get information about the addresses and balances of senders and recipients. Thus, everything that happens on the blockchain can be analyzed and any blockchain user can be deanonymized. Therefore, the lack of privacy is called the main problem of most cryptocurrencies. And in this case we are talking about their pseudo-anonymity .
What is cryptocurrency pseudo-anonimyty
The user of the Bitcoin network or any other pseudo-anonymous cryptocurrency can be de-anonymized after re-using the address or passing verification on the exchange. Whereas anonymous cryptocurrencies use cryptographic protocols that complicate data auditing. The address of an anonymous cryptocurrency wallet can only be disclosed by its owner.
We recommend purchasing all the currencies listed below on a trusted exchange. For example Binance.
Rating TOP 10 best anonymous cryptocurrencies
The pseudonymity of cryptocurrencies has forced developers to start creating truly anonymous altcoins. Among them, a real race began: new anonymous tokens were issued and various protocols were applied to maximize the protection of user privacy.
TOP 10 anonymous cryptocurrencies in 2021:
1. Monero (XMR)
Foundation year - 2014
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| Currency | $ 386.65 | -5.21% | $ 6,919,851,840 | $ 1,023,140,439 |
Monero rightfully bears the title of “the most anonymous cryptocurrency”. The system automatically hides the sender and recipient of XMR coins, as well as the transfer amount.
Monero uses an integrated approach to ensure privacy, which consists of several mechanisms:
- Coins, the CryptoNote algorithm used allows effectively masking the personal data of the sender, recipient and the amount in the blockchain. Also, ring signatures are used for this: the transaction is signed by several addresses, and it is impossible to determine from which address the money went.
- For each operation, invisible stealth addresses are randomly generated , which guarantees the anonymity of recipient addresses.
- RingCT (Ring Confidential Transactions) anonymize the amount of coins transferred.
In the fall of 2018, instead of RingCT, the Bulletproofs mechanism was activated , thanks to which the size of transactions and fees decreased.
Disadvantages of the Monero network:
- Large transaction size: Monero blockchain is 5 times larger than Bitcoin blockchain per transaction;
- Scalability issues.
2. Zcash (ZEC)
Foundation year - 2016
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| Zcash | $ 244.23 | + 0.19% | $ 2,653,273,256 | $ 1,808,752,761 |
The anonymous cryptocurrency Zcash is based on the Zerocoin protocol and uses the zk-SNARK zero knowledge proof protocol to ensure privacy . It allows you to sign transactions without disclosing personal information (points of exit and entry of the transfer, amount). Due to this, only the time of the payment is saved during transactions.
The peculiarity of Zcash is that both anonymous and public transactions work on the network on equal terms.
Coins in the Zcash network are interchangeable, and it is impossible to track who used certain ZECs before.
Transfers in the network are carried out as follows: The sender sends a certain number of coins → using the overview key, the Recipient finds this transfer in the network, decrypts it and gains access to the funds.
However, in order for the transfer to be carried out exactly according to this scheme, the sender must select the transaction protection option . Anonymous transactions in Zcash can only be made from encrypted z-addresses that are not visible on the blockchain. During such transactions, funds are burned and exchanged for new coins.
In October 2018, the developers activated the Sapling update , after which the amount of time required to process secure transfers was significantly reduced. Moreover, this made it possible to carry out transfers not only from full nodes, but also with the help of light clients.
Disadvantages of Zcash:
- The complexity of the zk-SNARKs technology and the need for a trusted setup;
- Large blockchain size: Zcash blockchain is 8 times larger than Bitcoin blockchain per transaction;
- Higher commissions attributable to more powerful hardware.
3. Dash (DASH)
Foundation year - 2014
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| Dash | $ 305.57 | -2.23% | $ 3,083,330,840 | $ 1,665,245,235 |
DASH is one of the most popular coins on the anonymous crypto market.
However, anonymity on the DASH network is not the default.
To hide their operations, users use the PrivateSend security system, which works like a mixer. It splits coins into small pieces, mixes them several times between several users using random masternodes, and only then sends them to the final recipient. This multi-stage mixing makes it impossible to trace the communication between the sender and the recipient.
Anonymity on the Dash network is also achieved through a 2-tier blockchain system.
However, the system requires the mandatory use of masternodes, in which information about the sender and the recipient remains. Therefore, Dash cannot be considered a completely confidential cryptocurrency.
4. Komodo (KMD)
Foundation year - 2016
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| Komodo dragons | $ 2.670 | -11.02% | $ 334,810,733 | $ 15,753,846 |
Komodo (KMD) is one of the most interesting anonymous cryptocurrencies. It combines the best features of Bitcoin and ZCash and works on the basis of the unique dPoW (Delayed Proof-of-Work) consensus algorithm.
Delayed Proof-of-Work is a 2-tier algorithm, which is a kind of "hybrid" of reaching consensus in two networks at once: Komodo and Bitcoin.
And since all transactions are additionally registered in the Bitcoin blockchain, an increased level of security is achieved on the platform, and it is extremely difficult to hack the network.
For transfers within the network, the user can choose between regular transactions and anonymized ones. In the first case, public addresses are used - T-addresses, the data for which is tracked in the blockchain. In the second, only the very fact of the transaction is recorded, while the recipient and the transfer amount remain hidden.
5. Verge (XVG)
Foundation year - 2016
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| Verge | $ 0.05861 | -7.80% | $ 963,927,125 | $ 142,068,159 |
The Verge cryptocurrency is a fork of Dogecoin. Unlike other anonymous projects, where cryptographic methods are used for anonymization, Verge's privacy is achieved through the use of I2P and TOR networks. They hide the real IP addresses of users and mix up the transmitted traffic.
Many users criticize this approach because the network becomes dependent on many relay nodes and the risk of hacking increases.
However, thanks to the Wraith protocol, users can choose which transactions they want to use - public or anonymous. In the second case, stealth addresses are used to hide the transfer data.
6. Bytecoin (BCN)
Foundation year - 2012
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| Bytecoin | $ 0.0007968 | -1.49% | $ 145,950,465 | $ 241,276 |
Bytecoin was developed back in 2012 and is considered the first anonymous project that gave impetus to the development of a whole direction in the cryptocurrency industry. It is from Bytecoin that Monero and other anonymous coins originate.
The “progenitor” of all anonymous coins uses the classic CryptoNote algorithm.
The anonymity of transactions in the system is achieved through the use of ring signatures that combine different outputs with the same amount of funds into one transaction. As a result, it is impossible to identify either the sender or the recipient of the funds. In addition, Bytecoin users can generate a large number of disposable addresses from one wallet, which also makes it difficult to establish links between different addresses on the network.
7. Bitcoin Private (BTCP)
Foundation year - 2018
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| Bitcoin Private | $ 0.8073 | -1.07% | $ 3,863,741 | $ 1,514.71 |
Bitcoin Private cryptocurrency appeared on February 28, 2018, becoming an offshoot of the original Bitcoin network. However, Bitcoin Private is different from other forks of the main cryptocurrency. It became an exact copy of the Zclassic digital currency, which, in turn, was a copy of Zcash.
The cryptocurrency has several unique features that set it apart from Zclassic and other predecessors. These include the EquiHash algorithm, transparent and shielded transactions, a voluntary donation program for miners, and treasury fund management.
Transparent transactions contain data on entry, exit, number of coins and an electronic signature. Shielded transactions are only verified by the system and cannot be verified by third parties. The zk-SNARKS zero-resolution algorithm is used to verify them.
Thus, Bitcoin Private inherited all the principles of protecting the privacy of the Zcash network, but without rewarding miners.
8. PIVX (PIVX)
Foundation year - 2016
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| PIVX | $ 1.620 | -3.28% | $ 106,228,620 | $ 1,921,698 |
PIVX (Private Instant Verified Transaction) is a fork of the Dash cryptocurrency. As the name of the project suggests, it offers private, instant, verified transactions , as well as low fees.
PIVX is built on top of the Zerocoin (zero-value proof of authenticity) protocol , which hides information about transactions.
Public transactions are performed without any additional steps, while anonymous transactions use a double conversion scheme via zPIV . To make an anonymous payment, first, PIVX tokens must be converted to zPIV, and they are credited to the desired address already in the form of PIVX coins.
The project also implements a modified zPoS Proof of Stake algorithm , which provides coin holders with anonymity of their account balances.
9. NavCoin (NAV)
Foundation year - 2014
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| NavCoin | $ 0.6651 | -7.09% | $ 47,571,515 | $ 1,802,565 |
The NavCoin project focuses on the privacy of digital money data usage. NAV Coin uses dual blockchain technology .
All records are first passed through the NavTech buffer chain and then stored in the main chain. This mechanism allows you to exclude any communication between the sender and the recipient.
In addition to anonymity and independence in the use of digital money, NAV Coin provides:
- High level of scaling;
- Fast transactions: up to 30 seconds;
- Environmental friendliness of the system: no support in the form of huge computing power and energy resources is required.
10. Zcoin (XZC)
Foundation year - 2016
| Name | Price | Change 24h | Capitalization | Volume 24h |
|---|
| Firo | $ 11.50 | -7.09% | $ 135,193,069 | $ 12,745,420 |
To ensure the confidentiality of payments in the Zcoin system, the Zerocoin protocol is used . Zero-knowledge proof allows you to “untie” the coins from the sender, so the recipient of Zerocoin receives money in his account, but does not know who it came from.
Zero-knowledge proof information in cryptography (Zero-knowledge proof) - interactive cryptographic protocol that allows one of the communicating parties to check the accuracy of a statement (usually mathematical), while not having any other information from the second side.
The Zcoin cryptocurrency is popular with investors.
Do anonymous cryptocurrencies have a future?
Cryptocurrency has become a tool that has shown the failure of fiat money and the traditional system of financial relations.
Anonymity has become one of the key factors in the success of digital cash: holders of crypto coins have received the right to keep secrets about their transactions.
However, the lack of the ability to control the turnover of crypto money prevents their integration into the global financial system. Indeed, the main obstacle to the proliferation of anonymous cryptocurrencies is the negative attitude towards them from financial regulators. Since transactions on the network are very difficult to track, and sometimes impossible, some states go to extreme measures and impose a ban on the use of cryptocurrencies.
For example, in Japan, it is forbidden to trade anonymous cryptocurrencies on exchanges. However, Japanese citizens have not stopped buying anonymous coins, they just do it now not on Japanese cryptocurrency exchanges, but on other sites. The US Secret Service also stated the need to counter the proliferation of anonymous cryptocurrencies.
Advantages and disadvantages
+ Security of personal data: personal information, transaction history, payment details
+ Confidentiality of financial transactions
+ Minimizing the risk of theft of funds
+ Internet privacy
- Ease of use for criminal activities: buying drugs and other illegal goods, money laundering
- Pressure and increased control from governments and financial regulators
- The use of specialized software by attackers to extract such tokens using the computing power of ordinary users
- Increased transaction size
- Higher commissions due to the use of more powerful equipment
Conclusion
Monero lead developer Ricardo Spagni once said:
Confidentiality is not a static concept. Privacy is a constant race between cryptographers and hackers. There is no absolute confidentiality.
Therefore, it is important to understand that those privacy mechanisms that worked yesterday may be ineffective tomorrow. Aware of the growing need of users to maintain the privacy of their lives, including its financial component, the developers do not stop working on anonymous crypto projects. New coins and new technologies are being created to hide personal information about the sender and recipient, as well as the terms of their transaction. Online anonymity has become a daily reality, and users are not going to give it up.
Despite the bans and restrictions on the part of states, experts believe that most cryptocurrencies will become anonymous in the near future.
Time will tell if digital currencies with an increased level of privacy can withstand pressure from regulatory structures. But the pursuit of privacy, which is taking hold in society, gives rise to optimistic predictions.
