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Definition: privacy crypto


A cryptocurrency that offers advanced privacy features, including concealing sender/receiver identity, transaction history and coin balance. For example, Monero and Zcash hide everything. Verge uses onion routing to hide the user's IP address (see Tor), and Dash (digital cash), a variation of Bitcoin, mixes up transactions. See Monero, Dash, Zcash and Mimblewimble.

Why More Privacy?
Everyone's public address is visible on popular blockchains such as Bitcoin and Ethereum, and all past transactions are visible. If an address is matched to particular individuals or organizations, all their crypto activity can be traced as well as their current coin balance.

Multiple Keys Help Obfuscate
Individuals and organizations may opt to create a new public key for every transaction they make. This is an option in a crypto wallet, and companies may choose this method to organize their transactions for accounting purposes. There are also other obfuscation methods (see crypto tumbler).

Governments Are Interested
Although nations are interested in crypto in general, regulators target privacy-oriented cryptos because they are often used in illegal transactions. Nevertheless, given enough time and effort, crypto pundits claim all blockchain transactions are traceable. See PriFi, Monero, Dash, Zcash and crypto glossary.