Anonymity of Cryptocurrency Has Been of Concern

With governments and institutions intensifying their tracking of financial activities

Anonymity of cryptocurrency has been of concern with governments and institutions intensifying their tracking of financial activities. While Bitcoin is pseudonymous, it is not entirely anonymous due to its public ledger. This is the reason why anonymity cryptocurrencies like Monero (XMR) and Zcash (ZEC) emerged, both of which were working towards preserving user anonymity. But of the two, which privacy coin is superior?

Monero: A Fully Private Blockchain by Default

Monero privacy is a building block from the very beginning. Unlike Bitcoin, with all its transactions being visible, Monero has transaction details defaulted to privacy with a combination of ring signatures, stealth addresses, and Ring Confidential Transactions (RingCT). These render senders, receivers, and transaction amounts anonymous to the public eye.

One of Monero’s best advantages is that privacy is baked in by default. All transactions on the Monero blockchain are protected by default, which means users do not have to do anything special to secure their financial data. That makes BTC to XMR an excellent choice for those who require complete financial anonymity without compromising usability.

Zcash: Private by Choice with Shielded Transactions

Zcash accomplishes privacy differently. Instead of having all transactions private by default, it includes an optional privacy feature based on zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge). It fully encrypts transactions but makes them verifiable on the blockchain.

While Zcash has robust cryptographic privacy, few people use shielded transactions. Exchanges and wallets tend to have unshielded Zcash transactions available only, so most ZEC transactions are visible on the blockchain unless users explicitly opt to use private transactions. This offers a privacy trade-off: Zcash might have excellent encryption technology, but it is user-dependent.

Which Offers More Privacy?

Technically, both Monero and Zcash possess top-level privacy capabilities, advantage of Monero being that it is private by default. The fact that all Monero transactions are blinded by default ensures no one can unknowingly leak their financial information. In contrast, users of Zcash must choose to use privacy, and this can create a scenario of reduced anonymity if the majority of people choose transparent transactions.

For users who desire financial anonymity for all transactions, Monero is the clear choice. Zcash remains a viable option for users who would prefer to have the ability to switch between public and private transactions.

Adoption and Real-World Use Cases

Monero’s anonymity has also made it the choice for anyone who requires totally anonymous transactions. It is being used for discreet payments, financial independence, and donations to institutions that require confidentiality. Monero is relied on by numerous businesses and individuals due to its strong privacy guarantees.

Zcash, though, has been popular with institutional users due to its regulatory-friendly transparent transactions. Zcash is favored by certain financial institutions and exchanges precisely because it allows them to offer privacy without removing regulatory oversight.

Swapping Between Privacy Coins

With increasing privacy concerns, most users look for ways of sending their money anonymously between cryptos. One of the most common methods is swapping Bitcoin with Monero for enhanced privacy. Users who wish to exchange the money can use services offering BTC to XMR exchanges, which allow them to send their Bitcoin to an entirely anonymous crypto without compromising on anonymity.

Conclusion

Both Zcash and Monero are the best privacy coins, but the former is different in usage. Monero is the best for users requiring complete anonymity throughout all of their transactions. It has mandatory and default anonymity, whereby all its financial transactions are hooded. Zcash, with its technologically advanced nature, relies on users adopting its anonymity features, and therefore it is not suitable for massive anonymity. For the privacy-conscious above all, Monero remains the best option. Zcash’s voluntary privacy mode and flexibility may however suit such users who need a balance between secrecy and openness.