President Joe Biden’s executive order on crypto is a huge deal. It will help establish regulatory precedents for a market with unlimited potential. The news is also triggering a big movement for privacy-focused currencies. Could this digital asset niche be the next class of cryptos to buy?
Indeed, privacy coins are gaining on Wednesday. These cryptos focus on traceability; they preserve the essence of crypto as a decentralized asset, with the addition of privacy atop what others offer.
The interest also stems from developments in Eastern Europe. As Russia continues its invasion of Ukraine, the U.S. and other global players have levied sanctions against it. As a result, there is speculation that Russia will be able to use cryptocurrency to minimize sanctions.
The theory is highly polarizing, and it is attracting the attention of those on Capitol Hill. In fact, a bill led by Sen. Elizabeth Warren is making the rounds, with the goal of requiring U.S.-based exchanges to supply the U.S. Treasury with detailed records of customer transactions.
In the eyes of some crypto bulls, this threatens the decentralized nature of digital currencies. If you share those fears, here are five of the best privacy cryptos to buy now:
Privacy Cryptos to Buy: Monero (XMR-USD)
Monero is by far the most popular player in the privacy niche. The coin has established itself as one of the most reliable avenues for private transactions on the market. Moreover, it is proven to be a crypto with plenty of growth potential; thus, it is one of the best cryptos to buy in the wake of regulatory tightening.
With its market capitalization of $3.4 billion, Monero’s XMR represents the largest dedicated privacy coin in the world. This is with good reason; Monero’s model is provenly effective at making cryptos anonymously tradable.
Monero doesn’t try to be like Bitcoin (BTC-USD) or Ethereum (ETH-USD). These networks each have their own public chains, where data is easily searchable and transactions are always visible by others. Monero has its own chain, indeed, but it is entirely private. In doing this, all Monero users can remain completely anonymous, even in linking outside wallet addresses. The network alleviates this bit of identifying information through Stealth Addresses — one-time addresses made for each transaction.
Additionally, Monero implements technologies called Ring Signature and RingCT on its network to increase anonymity. Ring Signatures require multiple signees to process transactions; only one signee’s key is used to endorse the given transaction though, decided at random by the protocol. RingCT exists to block outsiders from seeing the amount transacted in a given swap.
As interest in privacy coins mounts today, XMR is easily one of the most benefitted projects. Trading volume of XMR is up 350% today. The coin is also seeing an 11% gain in the wake of the trading influx.
Zcash is a close competitor to Monero, holding a $2 billion market cap. But don’t mistake it for a clone of Monero; the Zcash network presents an interesting take on privacy, giving its users plenty of options when it comes to how much privacy they wants in their transactions.
The Zcash network splits addresses into two categories: z-addresses and t-addresses. These addresses are private and public addresses, respectively. These address types present four different types of transactions on the network. Z-z transactions are those which occur between two private addresses. As such, the network shields all of the information associated with the transaction from the public. T-t transactions occur between public addresses, meaning all transaction data is publicly recorded and readily available. T-z and z-t transactions, then, each shield only one side of the transaction from the public.
Zcash, like Monero, uses a unique encryption method to achieve its privacy. The project says it is the first to utilize this method, called Zero Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKs). Zk-SNARKs proofs allow a party to prove the validity of a transaction to a verifier without actually giving that verifier any information about the data.
Just like Monero, Zcash is seeing great demand today in the wake of the executive order and Warren’s bill. ZEC is gaining over 12%, with trading volume increasing by 70%.
Privacy Cryptos to Buy: Oasis Network (ROSE-USD)
Oasis Network is a slight departure from Zcash and Monero in terms of its offering. Oasis is a layer-1 blockchain network with an emphasis on privacy. Rather than primarily serving as a means for transactions, users can find a host of decentralized apps (dapps) on the network to utilize.
The Oasis Network utilizes two different layers to ensure a smooth throughput of transactions. The first of these, the ParaTime Layer, is where much of the network is located. It runs multiple runtimes which support the dapps on the network. The Consensus Layer operates atop the ParaTime Layer, executing all of the transactions that occur on the network.
The network leans into privacy through confidential smart contracts. By allowing developers to utilize confidential contracts, they are able to develop dapps that deal in sensitive information with having to reveal this data to the rest of the network.
As of right now, there are over 50 dapps on the Oasis Network. And, developers are pushing hard to bring others to their platform. In late 2021, the project unveiled a $160 million fund to help build out its DeFi, Web 3.0, non-fungible token (NFT) capabilities and more.
Oasis Network is not immune to the privacy crypto gains today; the ROSE token is seeing a 9% gain atop a 50% increase in trading volume on the newfound interest.
Secret is a network that’s leaning hard into Web 3.0 development. The jumpstart SCRT coin fuels another dapp network that is finding fast success since its launch less than two years ago. As it continues to add to its rapidly growing $800 million market cap, SCRT could be one of the best privacy cryptos to buy.
The Secret network calls itself “the first blockchain with privacy-preserving smart contracts.” The protocol encrypts all smart contract inputs and outputs in order to achieve this claim, making the data executed through these smart contracts secure and private.
Since launching, the network has been able to secure just over a dozen dapps. These dapps cover a variety of services, from peer-to-peer messaging to file sharing to cloud storage and NFT trading. As it continues to bulk up, Secret is sure to be a force among Web 3.0 blockchain ecosystems.
The SCRT coin which underlies the network is used as a means of transaction for dapp users. It also is used as a decentralized staking currency on the network’s various DeFi tools, and owning SCRT gives one governance power on community proposals and upgrades.
In the wake of the privacy coin boom today, SCRT is gaining over 14%. Trading volume is up as well with over $65 million in SCRT swapping hands, representing a 145% gain over yesterday’s volume.
Privacy Cryptos to Buy: Horizen (ZEN-USD)
Horizen is one of the best privacy cryptos to buy because it is one of the fastest-growing interoperability players that leans into privacy as a main concern. Calling itself “the network of blockchains,” Horizen is aiming to be the go-to private bridge from network to network.
Since launching in 2017, the Horizen ecosystem has been able to link together 10 different blockchain projects using the same zk-SNARKs tech that Zcash and Monero boast. Any user on any of these networks’ dapps can use Horizen to privately and securely move assets to any other network’s dapps.
One of the biggest draws to Horizen is also its absolutely massive node network. It has a fleet of over 44,000 nodes underlying it. This is a huge aid to Horizen’s scalability; Horizen developers say the ecosystem is capable of processing up to 10 million transactions per second.
As the privacy crypto interest continues to rise, the ZEN coin is rising 16%. Trading volume is seeing a rise of over 170% as well.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.