Bitcoin transactions are traceable to your identity through exchanges, creating privacy risks. Privacy coins like Monero hide sender, receiver, and amounts, but stronger privacy can enable illegal use. Some coins like zcash offer selective transparency for auditing.
Our Altcoin focus this week is on privacy Coins do you think Bitcoin is private? Many believe yes. However, for those who use cryptocurrency for legitimate purposes, it is not. When you purchase cryptocurrency through most exchanges, you are required to prove your identity. This means that your identity is tied to the wallet you use to purchase those coins with, and anyone you purchase something from with that wallet will now be able to see all of your past transactions. For example, in the future, if you want to send your kids some Bitcoin to go see a movie, they could use your address to find out just what you've been spending your money on when they're not at home. This poses a problem for those who value their privacy and becomes even more unsettling when you think of what others can do with your financial information. For example, recently it was revealed that massive amounts of data was being siphoned from Facebook users and compiled to create profiles designed to target users in individual ways. So if you were worried about Mark Zuckerberg stealing that selfie of you sipping my ties in Fiji, imagine if he knew exactly what you spent your money on while you were there. The lead developer of Monero, Riccardo Spagni, said it best this past January at Coinbase headquarters after an operator of Xmong Exchange was kidnapped and ransomed for Bitcoin. If we don't have financial privacy, there are bad things that can happen. We might end up with targeted advertising based on spending habits or targeted crime against the wealthy. You go to a local bitcoin exchange and the next minute you're held up at knifepoint. Even worse, you go to pay with Bitcoin for an item, and now the owner knows your bank balance. This realization is what motivated the creation of coins like Monero, Dash, zcash, Verge, and Bytecoin, as well as a dozen or so more. These coins hide all of the information in any transaction so that no one can see who or how much was involved in an exchange. Problem solved, right? Not exactly. This level of privacy created a new problem of complete anonymity, which greatly increases the likelihood of these cryptocurrencies being used for illegal means. It means that large amounts of money can be moved all over the world with no taxes being paid and no backlash for any illegal actions. It might be tied to some privacy. Coins like zcash have the option for companies to only obscure portions of transactions for auditing purposes. But is this enough? Privacy is popular, and the top two coins alone have a combined market cap of 5 billion that is a lot of money floating around there being spent on Satoshi knows what Are privacy coins a good idea? Do you use privacy coins? Let us know which ones you think are the best and why in the comments below.
