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HomeBlogIntroducing Privacy Coin: How Does It Shield a User from Prying Eyes?

Introducing Privacy Coin: How Does It Shield a User from Prying Eyes?


  • Privacy coins hide the data associated with a transaction via cryptographic techniques. 
  • Cryptocurrencies like Monero (XMR) and Zcash (ZEC) have these features to prevent cyber threats and other malicious activities.

What are Privacy Coins?

Privacy coins are those cryptocurrencies that obscure the details of the sender and recipient to provide anonymous transactions. This detail-hiding technique makes this coin a privacy-focused crypto that prevents any further malicious activities and shields the users from prying eyes. Other cryptocurrencies like Bitcoin and Ethereum are popular, but they aren’t considered privacy coins, which some users assumed they were. These cryptocurrencies rely on blockchain for public view via distributed ledger technology; hence, they aren’t completely anonymous while being prone to cyber threats.

Privacy coins possess privacy-enhancing features designed to reduce traceability and enhance a transaction’s anonymity. These coins operate similarly to fiat currencies but within a digital environment to ensure the privacy of data related to a transfer protocol. It’s more like an ATM withdrawal, where the bank manages a record but there is no trace of the expenses until and unless the amount is deposited back to the bank.

The cryptocurrency exchanges that support privacy coins need an initial ID verification from an individual. However, the traceability or revelation of these datasets is difficult for the exchanges due to the private features of these privacy coins. However, these coins are more shielded from any kind of traceability compared to other cryptocurrencies. Hence, analysts with advanced tracing can leverage the benefits of these coins.

How Do These Coins Work?

These coins use a unique approach, including methods that conceal the history of their user’s transactions and identities. Here we’ve mentioned the list of strategies that are used by these privacy coins:

  • Stealth Address

This feature is responsible for the creation of a new address every time a user receives any type of cryptocurrency. Monero coin is one of the cryptos that utilize this method of generating a public address. Private keys also display a private spend key in the case of fund transfers and incoming transactions.

  • Ring Signature

It joins multiple users together in a ring format to obscure their specific identities. This method makes it more difficult to identify or track which user created a certain signature. This method of data hiding is used by Bytecoin and Monero (XMR) to secure a transaction.

  • zk-SNARK

This term, zk-SNARKs stands for zero-knowledge Succinct Non-Interactive Argument of Knowledge. This method integrates cryptography to prove a transaction’s authenticity without revealing its details. Zcash is one of the privacy coins that has applied the zk-SNARK methodology on a large scale.

There are some of the best examples of Privacy coins listed below:

  • Monero

This coin is considered to be at the top of this list due to its integral privacy features. This cryptocurrency aims to keep its user’s transactions hidden and untraceable at the same time. 

  • Dash

Unlike Monero and Zcash, Dash doesn’t entirely focus on privacy; instead, it offers an optional privacy feature with its PrivateSend function to obscure transactions.

  • Zcash

This privacy coin utilizes zero-knowledge proof technology to make transactions anonymous while hiding the transaction details from the public ledger.


These coins are gaining popularity due to their methods, making them one of the most suitable choices in this vast crypto landscape, where several cyber threats are present and malicious activities are not an untouched concept. Privacy coins allow users to hide their transaction details from public view to ensure the integrity of their data and the safekeeping of crypto assets. The features offered by these coins prove to be beneficial for transactions between business institutions and their clients in terms of personal spending and banking as well.


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