Privacy coins are cryptocurrencies that have been designed to provide users with anonymity and protect the financial transactions they carry out on blockchain networks and digital ledgers. Many crypto users value privacy above all else and turn to these coins to protect themselves and their assets.
As the crypto sector becomes more global in nature, and as governments move to regulate the industry, a growing number of people are turning to privacy coins to shield themselves from hacks, thefts and regulatory oversight. While increasingly popular, detractors raise issue with privacy coins and the anonymity they provide. They express concerns that criminals abuse privacy coins to launder money and facilitate illegal activities around the world.
For this reason, privacy coins have found themselves in the crosshairs of regulators in the U.S. and abroad. Despite the controversy, privacy coins seem to only be gaining in popularity. Here are the top three privacy-focused cryptos for a secure investment.
Zcash (ZEC-USD) is a lesser known cryptocurrency, but it is a leader when it comes to privacy coins. ZEC is largely based on Bitcoin (BTC-USD) and has much in common with the biggest crypto, including a fixed total supply of 21 million coins. However, Zcash employs a cryptography that gives it enhanced privacy protections compared to BTC and other digital assets. Specifically, transactions undertaken on Zcash’s blockchain can be either transparent and publicly visible, or they can be shielded and kept private.
The privacy and anonymity offered by Zcash has endeared it to fans all over the world. As a smaller cryptocurrency, ZEC is subject to volatility and its price can fluctuate wildly over short periods of time. Most recently though Zcash has been on an upswing, having risen 16% since early March. As the growing threat of regulation makes privacy increasingly important among cryptos, I expect Zcash to get more attention from investors.
Dash (DASH-USD) is an altcoin that was created by a fork in Bitcoin. However, DASH is also a privacy coin. It uses a system called PrivateSend to jumble multiple transactions together and make it more difficult to identify and track the details. Dash has been criticized and labeled a Darkcoin for being used in transactions carried out on the dark web, a part of the internet where users can access web content anonymously through special web browsers.
Criticism aside, DASH functions well as a privacy coin, offering a level of anonymity that many crypto users crave. However, the privacy provided by Dash has made it a target of regulators who are stepping up their enforcement of the crypto sector. The U.S. Department of Justice claims in a report that Dash helps finance cybercrime. Advocates acknowledge that Dash is subject to abuse but say that it ultimately serves a greater good.
Monero (XMR-USD) is arguably the most anonymous of privacy coins. Transactions carried out using XMR are private at all times and cannot be traced. Monero utilizes privacy technology that hides from view the sender, recipient and amount of each transaction that’s executed. The level of privacy provided by Monero is attractive for many reasons. However, it has led to charges that the cryptocurrency can be used for global money laundering and other nefarious schemes.
Monero’s price has gained nearly 80% since 2017. At its current level of more than $150, XMR is one of the higher priced cryptos. However, Monero also remains volatile and can be subject to sharp price downturns. Its price has fallen 28% over the last 12 months. That said, many crypto bulls remain excited about Monero, noting that a growing number of users are gravitating to the privacy if provides.
On the date of publication, Joel Baglole did not have (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.