What are Privacy Coins? Everything You Need To Know
Privacy is a major concern for many cryptocurrency enthusiasts. Take a closer look at what these privacy coins are.
Privacy is a major concern for many cryptocurrency enthusiasts. The main reason behind this is that blockchain technology was designed to be transparent and open.
It is meant to give everyone equal access to information. This means that anyone can see all your transactions and balances on a public ledger.
In the past few years, many solutions have been introduced to address this problem. One of them is the use of privacy coins. Privacy coins are designed specifically to offer users anonymity when it comes to their transactions and balance sheets.
In this article, we’ll take a closer look at what these privacy coins are and how they work.
What are Privacy Coins?
Privacy coins are cryptocurrencies that are designed to protect your identity and personal information. They allow you to make payments anonymously, send funds across borders, and protect your data from hackers.
Privacy coins are different from most other cryptocurrencies because they use advanced encryption techniques to hide the identities of their users. This means that no one can see who is sending or receiving payments through the blockchain.
In addition, privacy coins have built-in protection against hackers who might want to access your personal information or steal your funds from an exchange site.
New to crypto? Start with our crypto 101 guide.
How do Privacy Coins Work?
In cryptocurrencies that use public blockchains, such as Bitcoin and Ethereum, any recorded transactions will show the sender, receiver and amount exchanged.
In contrast, privacy coins use specialised software to conceal the parties involved in transactions. For example, we will explain how the famous privacy coins – ZCash and Monero work.
ZCash uses zero-knowledge proofs known as zk-SNARKs for its privacy feature. They offer options for private and transparent transactions. If you choose to use a t-address, your transactions will be handled like other cryptocurrency transactions.
If you choose to use a z-address, your identity will be kept private. These z-addresses operate on zero-knowledge proofs, which validate that the transaction occurred for both sellers and buyers without revealing any information about the transactions.
Monero makes it difficult to trace any transaction information on the blockchain by using stealth addresses and ring signatures.
Stealth addresses hide the identity of an account by making outside viewers of the blockchain unable to see the association between two accounts participating in a Monero transaction. Ring signatures further hide the identity of a sender by mixing their identity with other decoy identities.
Are Privacy Coins Legal?
The answer is: it depends.
While a lot of people are worried about cryptocurrencies being illegal, the truth is that most of them are actually legal in most countries around the world.
However, some countries have begun to regulate them. And there are also some cryptocurrencies that are banned entirely.
As privacy coins become more popular, it’s important to keep track of organisations like the Financial Action Task Force (FATF).
The FATF has not yet banned such coins, but it has made things difficult for exchanges and countries that are subject to information-sharing requirements due to regulations like the FATF Travel Rule.
Where to buy privacy coins?
Now that you know what privacy coins are, how it works, and what you can do with it, how do you get your hands on some?
There are many options online to buy and sell Privacy Coins, although it is always recommended to do it with a trusted local exchange platform.
Through Easy Crypto, you can easily buy and sell Privacy Coins, as well as swap between various cryptocurrencies.
We are headquartered in New Zealand, and now operate globally in Australia, and South Africa as well.
Ready to invest? Click here to browse our 160+ cryptocurrencies in Easy Crypto.
How to buy privacy coins?
That being said, if you’re looking to add privacy coins to your crypto portfolio follow our step-by-step guide below.
Step-by-step on how to buy privacy coins:
- Sign in to your Easy Crypto Account
If you’re a new user — welcome! Click on the Sign-up button to create an account and proceed with the account verification process.
- Select the cryptocurrency you want to buy
When you want to select the crypto asset. Navigate to the homepage and select the cryptocurrency you want to buy and enter the amount that you want to spend. Then at the end, click the Buy Now button.
Please note: in order to purchase privacy coins, you’ll need to provide some extra information to get your account upgraded. Once your account has been upgraded, our team will get back to you via the email address.
- Enter your wallet’s receiving address
Once you’ve finished choosing your crypto asset, enter your wallet’s receiving address to the corresponding cryptocurrency you want to purchase.
What’s a wallet receiving address?
Your crypto needs a home! Before choosing to buy a cryptocurrency, make sure you download a crypto wallet software that can store it for you.Follow the instructions carefully on how to set up, receive, or transfer crypto.
- Select your preferred payment method
Choose the payment method that you prefer from our selection of payment options.
Tip: Make sure that you are logged into the correct country website. For example, if you verified your account with Easy Crypto Australia, be sure to log into EC Australia to be able to transact.
Further reading: Explore our learning hub at Easy Crypto.
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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.
Last updated December 6, 2022