8 Best Privacy Coins in 2023: Secure and Anonymous Transactions
Monero and Zcash are the poster boys for the best privacy coins, and they often overshadow other equally viable alternatives that prioritize privacy and anonymity. If you’re curious about exploring these lesser-known options and finding the perfect privacy coin to match your needs, you’re in the right place.
What are Privacy Coins?
Privacy coins are a subset of cryptocurrencies designed to enhance the confidentiality and anonymity of transactions on the blockchain. Unlike traditional cryptocurrencies like Bitcoin, where transactions are transparent and traceable, privacy coins employ advanced cryptographic techniques to shield sender, receiver, and transaction amounts from public visibility.
They do this through methods such as coin mixing, ring signatures, zero-knowledge proofs, and more. To give a quick preview:
- Coin mixing blends transactions together, making it practically impossible to link specific coins to individuals.
- Ring signatures ensure that transactions are signed with a group of possible signers, obfuscating the actual sender.
- Zero-knowledge proofs enable verification of transaction details without revealing sensitive information.
While these are the most popular mechanisms used in privacy coins, there are many more out there that we cover in-depth in our complete guide on privacy coins.
Privacy coins reflect the growing demand for financial privacy in the digital age, protecting individuals from surveillance and preserving their fungibility.
How to Choose the Best Privacy Coin in 2023?
There isn’t much difference between choosing the best privacy coins and choosing the best cryptocurrencies in general, except one: people generally buy Bitcoin and other cryptocurrencies as a form of investment, but when it comes to privacy coins, it’s the utility that attracts many.
So, along with the fundamental factors one should consider when investing in cryptocurrencies, here are some additional ones that apply to privacy coins –
Technology and Privacy Features
When choosing the best privacy coins, it’s crucial to dig into their technology and privacy features.
Seek out coins that employ robust cryptographic techniques like zero-knowledge proofs, such as zk-SNARKs and zk-STARKs, alongside ring signatures.
Additionally, assess the coin’s anonymity set – the number of participants in a transaction. A higher number of participants enhances the complexity of tracing origin and destination, bolstering overall privacy. Therefore, coins with larger anonymity sets provide an added layer of security.
Lastly, consider how decentralized a coin’s network is. A highly decentralized network minimizes the risk of a single point of failure and reinforces resistance to censorship.
Community and Development
Transparent development practices are crucial when investing in a project. Research the development team behind the coin and look for experienced professionals with a track record of successful projects in the past, preferably in privacy and cryptography.
The level of adoption and community support can also indicate a coin’s credibility and potential for long-term viability. A strong community can drive development, improvements, and adoption.
Use Cases and Viability
Begin by examining the coin’s blockchain transaction speed and scalability. A sluggish network can impede seamless transactions and lead to frustrating delays. Compatibility is equally essential. Ensure the coin’s technology aligns with existing infrastructure and exchanges, facilitating its purchase, trading, and usability across different platforms.
Next is use cases. Some privacy coins are tailored for specific applications like private messaging or decentralized finance. Choosing a coin aligned with your intended use is recommended. In fact, check out the coin’s roadmap and future development plans. A well-defined vision and continuous commitment to enhancements indicate its long-term potential and relevance.
Lastly, consider the coin’s regulatory stance. While privacy is important, certain coins might attract regulatory scrutiny due to concerns about illicit activities. Monero, for instance, faces bans on some US exchanges.
Security
Security of the network is crucial, whether that is internal or external.
Look for coins with robust security measures, regular audits, and a history of successful protection against attacks to prevent potential external threats. On the other hand, prioritize transparent governance models and open communication about updates, changes, and community input to avoid internal misconduct.
Market Considerations
Research the coin’s historical performance and reputation. Avoid coins with a history of security vulnerabilities, controversies, or significant price manipulation.
On the other hand, favor coins with high liquidity, as that ensures you can easily buy or sell the coin without causing significant price fluctuations.
Now that we know what factors to consider in an ideal privacy cryptocurrency, let’s dive into the list:
1. Monero (XMR)
Monero (XMR) has maintained its position as the leading privacy coin since its inception in 2014. Developed under the CryptoNote protocol, it prioritizes anonymity and fungibility by employing advanced cryptography techniques, such as ring signatures and stealth addresses, to obfuscate sender and recipient details, ensuring confidential transactions.
Additionally, Monero utilizes a unique feature known as Ring Confidential Transactions (RingCT) to conceal transaction amounts, preventing outsiders from determining the exact transaction value.
Its robust privacy measures have earned Monero a reputation for being one of, if not the best, privacy coins for privacy-conscious users, contributing to its massive popularity. As of now, Monero’s price hovers around $137.52, with a market capitalization exceeding $2.5 billion.
You can buy Monero from various cryptocurrency exchanges, including Binance, Kraken, and KuCoin, among others.
2. Zcash (ZEC)
Zcash (ZEC), launched in 2016, is a prominent privacy coin offering users the option of both transparent and shielded transactions. This dual nature allows users to choose between transparent transactions, similar to Bitcoin, or opt for shielded transactions that provide enhanced privacy.
Founded on the Zerocash protocol, Zcash employs zero-knowledge proofs, notably zk-SNARKs, to enable users to prove the validity of transactions without disclosing any transaction details, thus facilitating completely anonymous transactions while still maintaining a public blockchain.
As of writing this piece, Zcash’s price is approximately $24.82, with a market capitalization of over $400 million. You can buy Zcash on exchanges like Coinbase, Binance, and Kraken.
3. Dash (DASH)
Dash (DASH) emerged in 2014 as an innovative cryptocurrency with an emphasis on both privacy and speed. Originally forked from Bitcoin, Dash introduced the concept of a two-tier network with miners and masternodes, enhancing transaction processing efficiency.
This privacy coin employs a technique called PrivateSend, which uses a mixing process to obscure transaction origins and destinations. Dash also offers InstantSend, enabling swift and near-instantaneous transactions. These features make it suitable for both everyday transactions and confidential dealings.
With a current price of $25.31 and a market capitalization surpassing $280 million, Dash remains one of the best privacy coins in 2023. You can buy Dash on most mainstream CEXs, like Binance, Coinbase, and Kraken, as well as other lesser popular platforms, like Gate.io, OKX, and Huobi.
4. Oasis Network (ROSE)
Next up on our list of best privacy coins is the Oasis Network (ROSE). Established in 2020, the Oasis Network emerged with a distinct approach to privacy and scalability.
The network combines confidential computing and blockchain technology to provide privacy features not only for transactions but also for smart contracts, making it a unique addition to the privacy coin space.
Oasis employs a two-layered architecture, with a mainnet and a parallel network called ParaTime. It utilizes secure enclaves for data protection, ensuring sensitive information remains shielded even from network validators. This unique model allows for scalability without compromising on privacy.
With a current price of approximately $0.04 and a market capitalization exceeding $250 million, Oasis Network has captured plenty of attention in a relatively short period, indicating potential for future growth. You can easily buy ROSE tokens on exchanges like Binance and KuCoin.
5. Decred (DCR)
Decred (DCR), established in 2016, is a unique privacy coin with a hybrid consensus mechanism that blends Proof of Work (PoW) and Proof of Stake (PoS). This innovative approach enhances security and decentralization while ensuring stakeholder influence in decision-making.
Decred’s privacy features are facilitated through CoinShuffle++, a protocol that ensures transactional privacy by mixing transactions to obscure sender and recipient details. Additionally, its on-chain governance empowers the community to propose and vote on changes, fostering a democratic ecosystem.
With a current price of $13.11 and a market capitalization of approximately $200 million, Decred holds its own in this list of best privacy coins. You can buy DCR on exchanges like Binance, Bittrex, and OKEx.
6. Verge (XVG)
Verge (XVG) entered the crypto scene in 2014 with the aim of enhancing privacy and anonymity in digital transactions. It utilizes multiple privacy-centric technologies, including the Tor network and I2P protocol, to mask IP addresses and obfuscate transaction data.
Similar to Zcash, Verge’s Wraith Protocol allows users to choose between transparent or private transactions, offering a degree of flexibility in privacy preferences.
As of now, Verge is trading at $0.0035 with a market capitalization of approximately $57 million. It’s currently available for trading on various cryptocurrency exchanges, including Binance, Bittrex, and Gate.io.
7. Bytecoin (BCN)
Launched in 2012, Bytecoin (BCN) is one of the pioneering privacy coins, setting the stage for other privacy-centric cryptocurrencies. Despite being an early entrant in the privacy coin realm, Bytecoin continues to survive among the other best privacy coins in the space.
Bytecoin’s technology centers around the CryptoNote protocol, which employs ring signatures and one-time addresses to obscure the sender’s identities and stealth addresses to shield recipient details.
With a current price of $0.00003 and a market capitalization of only $5 million, it’s clear that Bytecoin isn’t the most viable long-term investment option. However, it may be great for temporary use cases. You can buy BCN on multiple cryptocurrency exchanges, including Gate.io and HitBTC.
8. Beldex (BDX)
Last on our list of best privacy coins is Beldex (BDX). Launched in 2019, Beldex employs advanced innovative cryptographic techniques, like dual-key stealth addresses, that enable users to share only specific transaction details.
Currently trading at approximately $0.03, Beldex boasts an impressive market capitalization of over $200 million. You can buy Beldex on exchanges like Coinsbit, KuCoin, and Gate.io.
Final Thoughts
While some of the top privacy coins, like Monero and Zcash, stand out as great investment options, it’s important to note that privacy coins primarily serve utility purposes in the crypto space.
Unlike Bitcoin, which is often acquired as an investment, privacy coins are valued for their specific use cases. Therefore, selecting a privacy coin that aligns with your requirements and objectives is crucial.