Monero (XMR) and other privacy coins are popular among many users. Sure, because anonymity and privacy are high on the list of priorities for many crypto devotees. Authorities and regulators, on the other hand, are particularly concerned about anonymity.
The blockchain security company CipherTrace has now announced a tracking method that can apparently track transactions with Monero. Is the end now coming for the privacy coin?
In a press release dated August 31, 2020, blockchain security firm CipherTrace announced the first way to track transactions with Monero (XMR). At the same time, XMR was considered one of the most widely used privacy coins precisely because of its anonymity during transactions. CipherTrace’s tracking tool is so interesting that even the US Department of Homeland Security (DHS) seems to be interested in it.
Privacy Coins? Transaction tracking? If you’re asking yourself too many questions, you might want to get some basic knowledge first. And that’s exactly what we offer you in our rich knowledge library.
Monero transactions anonymous? No way!
The tracking tool for Monero (XMR) transactions is said to have been in development for a year now. But now CipherTrace is said to have made the breakthrough. While terrorist organizations such as the Islamic State (IS) have recently switched to the anonymous cryptocurrency in addition to normal users, it should now be possible to put an end to the criminal underbelly of the privacy coin. This is not good news for all who trust in casinos, which work with Monero.
The CEO of CipherTrace himself, Dave Jevans, commented on the breakthrough then thus: Monero (XMR) one of the most privacy-focused cryptocurrencies [in the world]. Our research and development team worked for over a year on techniques to provide financial investors with suitable analysis tools. And still there is a lot to do, however, CipherTrace is proud to present the world’s first way to track Monero [transactions]. We are also very grateful for the support we received from the Department of Homeland Security, whose Research and Technology Department assisted us with this project.
The U.S. Department of Homeland Security already announced its intention to use CipherTrace’s new analysis tools. No wonder, since the DHS ultimately commissioned the development by CipherTrace. The new tracking method is expected to be a breakthrough for law enforcement and government agencies in criminal investigations.
US authorities want to crack down on crime on the darknet
The analysis tools deliver features such as transaction search, tracking and visualization. Crypto exchanges as well as well-known OTC trading platforms are queried for data. Furthermore, investment funds and cold storage as well. The aim is to ensure that Monero (XMR) does not reach these platforms from illegal sources. According to CipherTrace, around 45% of all darknet markets use Monero as the payment method of choice. Formerly this was Bitcoin (BTC), but this seems to be considered more and more “unsafe” by criminal circles.
However, this should not change the future for Monero (XMR) for the normal user. Although options for identifying wallets and more are to be added in the future, none of this will affect the normal user. Or maybe it will? Because in the end, anonymity and data protection through Monero seem to be only illusions, at least in the case of legal authorities. However, the reactions of the market and the Monero developers remain to be seen for the time being. We will of course stay on the ball for you and report on further developments in the case of authorities versus privacy coins. As always, we look forward to your questions and feedback in the Telegram Community Chat!
Top 5 Anonymous Cryptocurrencies
Top 5 Anonymous Cryptocurrencies. Dash, Monero, Zcash and other anonymous cryptocurrencies are popular. What does anonymous actually mean and where can I buy them. Here is a brief overview.
Here we explain what you need to know about anonymous cryptocurrencies and how to buy them. Anonymous cryptocurrencies are also known as privacy coins. There are now many privacy coins and new ones are added every month. We present the most important ones from our point of view.
What are anonymous cryptocurrencies?
To clarify, let’s keep in mind that Bitcoin is not a truly anonymous currency. Rather, it is a pseudonymous currency. Bitcoin uses public keys to secure transactions. The key is perceived as private and anonymous because it is information that is not identifiable for the first time. However, a person can still theoretically be traced.
There may be many reasons for wanting a real privacy coin. Not only in the US do tax offices announce audits. Some blockchain users want to remain fiscally anonymous.
Fortunately, for individuals who want to use completely anonymous cryptocurrencies, there is a good selection. Of the more than 50 privacy coins currently available, we’ve picked out five:
Top 5 Anonymous Cryptocurrencies
Our top 5 picks for privacy coins are:
- Dash (DASH)
- Zcash (ZEC) & Zclassic (ZLC)
- Monero (XMR)
- Spectrecoin (XSPEC)
- PIVX (PIVX)
DASH is a further development of Bitcoin. Developers of Litecoin have also been involved. Dash wants to be a pure cryptocurrency. Accordingly, the main goal is faster, secure and scalable transactions.
The mining mechanism is proof-of-work. The hash algorithm X11 was developed to reduce the otherwise high energy consumption. X11 because 11 different hash algorithms are “chained” together. This results in more efficiency than e.g. the well-known SHA-256 (Bitcoin).
The PrivateSend feature of Dash provides financial privacy to users because the balance amount is hidden.
There are no more individual transactions on the network. Masternodes collect transactions and combine them into entire payment streams. As a result, the transfer path of an individual payment is no longer disclosed or traceable.
DASH makes clever use of decentralization and the X11 chain approach. This is exactly what makes it so different from pseudonymous cryptocurrencies and Bitcoin.
The main attributes of Dash are: instant confirmation, double-send security and an optional choice of anonymous transactions. Moreover, there is an autonomous and incentivized payout system via nodes.
You can buy DASH via CEX.io (see also our article Guide to CEX.io). An alternative is the provider Kraken. The latter is one of the largest providers for European users. Here you can choose between the pairs DASH/USD, DASH/EUR or DASH/XBT.
ZCASH & ZCLASSIC
Similar to Bitcoin, there is a finite number of tokens for Zcash. However, the distribution of the coins takes place much more slowly. This creates more of an artificial scarcity.
Zcash works with zero-knowledge proof. Here, the name of the account, the amount and the destination of the transfer remain secret. The zero-knowledge process verifies transaction without insight into the details.
Zcash relies on what is known as zk-SNARKs for transactions. This abbreviation stands for Zero-Knowlege-Succinct-Non-Interactive-Argument-of-Knowledge. The verifier does not have to do anything himself, but receives the Argument-of-Knowledge from the prover. In other words, the correctness of calculations are verified without having to perform them themselves. What was executed is unknown. What is known is only that it was done correctly.
Zclassic is a fork of Zcash. Miners prefer Zclassic partly because of higher block rewards after successful calculation. How to buy Zcash: At CEX.io the pairs ZEC/BTC, ZEC/USD, ZEC/EUR or ZEC/GBP are available. Alternatively, you can join Coinbase in the first step, then exchange EUR for Bitcoin. Via Binance you can then exchange Bitcoins into Zcash.
The cryptocurrency Monero focuses primarily on maximum anonymity and privacy protection. Instead of traceability and full transparency, Monero has deliberately chosen to focus on the others. The confidential transactions feature was added to Monero in January 2017. Since then, the currency has been receiving a lot of interest.
The function: Sent and received public keys are bundled so that the addresses remain hidden. Thus, an analysis of the corresponding blockchain – data is considered almost impossible. Monero has many features built into the high level of security and non-traceability. For example, RingCT, which is the concealment of the amount. In doing so, Monero does not associate the balance with the user’s public address. Monero (XMR) is available on the exchange Binance.
SPECTRECOIN provides tools for increased privacy, both for payment transactions and secure communication. All activities are encrypted using the OBFS4 protocol. Different layers of addresses protect the nodes from being associated with specific IP addresses. Attempts to trace user data and history on the web fail: traffic is distributed randomly across the network of nodes. The currency with the abbreviation XSPEC is offered at Cryptopia.
PIVX is designed for privacy, decentralized and open-source. The abbreviation stands for Private Instant Verified Transaction. The consensus method is based on proof-of-stake. The project provides an overview comparison, see the following image.
The currency is offered at several exchanges. For example also at Binance or Bittrex. You can find a complete list on the website of PIVX: pivx.org/exchanges/. Let us know if there is still an important anonymous currency missing and we will include and screen it.