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On day 17 of #KryptoSecure, I will take you on an expository tour on privacy coins, understanding the technology behind privacy coins, the myth or near-truths about privacy coins.
Privacy coins use a variety of cryptography-enhancing technologies to ensure anonymity in cryptocurrency transactions. These technologies are designed to obfuscate transaction details, making it challenging for outside observers to trace the sender, recipient, and transaction amount.
Privacy coins are a category of cryptocurrencies designed to enhance the privacy and anonymity of transactions. They can play a significant role in keeping your crypto assets safe by providing additional layers of security and confidentiality.
Cryptocurrency in it’s initial concept was supposed to ensure pseudonymousity but we all can testify even that is not in line of sight in the use of cryptocurrency anymore, so many factors affecting pseudonymousity, e.g simplication of address using DNS to resolve crypto transactions, use of CEX which makes use of KYC and your identity tied to any transaction involving the use of provided addresses.
To ensure anonymity certain individuals or companies seem it fit to create privacy coins, e.g Monero, Dash, Grin, Zcash. ectectra.
Privacy coins have been facing a lot of scrutiny and regulation issues, one of which led Binance to delist Monero.
Chainalysis have however debunked the anonymity of Dash claiming 99% of Dash transactions can be tracked and even Monero was said to have up to 30% of transactions tracking possibility.
Even though privacy coins technologies have evolved significantly to enhance transaction privacy and anonymity. However, the degree of privacy can vary between different coins and may be influenced by factors like user behavior and the ecosystem in which the coins are used.
Here are some benefits you could enjoy with privacy token.
1. Enhanced Anonymity
2. Protection Against Surveillance
3. Reduced Risk of Doxxing
4. Improved Fungibility
5. Secure Peer-to-Peer Transactions
6. Protection from Censorship
7. Preservation of Financial Confidentiality
It is however important that you use Privacy Coins for only legit transactions as investigations might be able to deanonymise your transactions.