October 19, 2021

What are privacy coins and how do they differ from Bitcoin?

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Cryptocurrencies are typically pseudonymous, but not necessarily private. Bitcoin (BTC) and other assets run on blockchains, with each transaction posted publicly online. During a transaction between two or more parties, assets move to different wallets, each represented by a string of characters. 

With these addresses and transactions visible to all, however, a certain level of trackability exists, especially if a wallet transfers funds to an exchange requiring Know Your Customer verification.

Certain crypto assets, which are often referred to as privacy coins, private coins or anonymous coins, attempt to hide information about transactions, giving users more privacy. Why might someone need privacy if they are not doing anything illegal? It could be preference or a view of privacy as a basic human right could be two reasons. Cash is largely private. Every transaction is not recorded somewhere for all to see with the click of a button.

A number of possible methods exist for adding privacy to Bitcoin, including peer-to-peer trading, although multiple crypto assets focus on privacy more directly via their technology. Some familiar privacy assets in the crypto space Title: What are privacy coins and how do they differ from Bitcoin?
Sourced From: cointelegraph.com/news/what-are-privacy-coins-and-how-do-they-differ-from-bitcoin
Published Date: Wed, 17 Feb 2021 15:33:23 +0000