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Crypto Privacy Sector

A comparison of the projects from the crypto-privacy sector



With increasing crypto-regulations from regulatory bodies around the world, there will be an increased need for privacy, why privacy coins might become more and more valuable.

Privacy coins have often been badmouthed and linked to criminal activities, but many users are simply people who ideologically value privacy, and believe that human beings have the right to a private economy.


Cryptocurrencies are anonymous, in the sense that you cant see who own which wallet, but they are not private.

All cryptocurrencies are based on the blockchain-technology, and as most blockchains have open public ledgers, wallets and transactions are right there for anyone to see.

This means that you could actually see all of a person or company’s transactions, if you figured out which person or company owned a certain wallet — something that in certain situations could have a big negative impact, for the owner(s) of the wallet.


Privacy projects try to solve this problem, by obscuring the transactions, communication and purchase history, so that it is not open knowledge which wallet caried out which transactions, or which transactions was done on the blockchain.


The most well known and — in many eyes — the best, is Monero ($XMR), but a lot of projects are focusing on the privacy aspect, and in this article we will try to compare the different projects.


Going through the crypto-privacy sector I counted more than 20 different projects, and this article will try to go through most of them.

Since this is a major task, I will have to keep the description of each project rather short, but I will try to replace superficiality with precision … the article will continue as this:

1. An overview of the current crypto-privacy projects
2. An overview of the most used privacy mechanisms
3. A run through of the different projects
4. A conclusion


1. LIST OF PRIVACY PROJECTS


Projects listed by market cap:

Monero — $ 2.7 Bn
Dash — $ 2.5 Bn
Verge — $ 976.6 M
ZCash — $ 672.76 M
ByteCoin — $ 419 M
Komodo — $ 274.8 M
PivX — $ 223.9 M
ZCoin — $ 131 M
Particl — $ 119.5 M
ZenCash — $ 86 M
NAVCoin — $ 54.3 M
Groestlcoin — $ 47 M
Aeon — $ 24.4 M
Zclassic — $ 15 M
Zoin — $ 13.9 M
Phore — $ 9.4 M
Spectre Coin — $ 6.5 M
Sumo Coin — $ 3.4 M
Bitcoin Private: ???
Cryptic Coin: ???

Projects listed by consensus mechanism:

PoW:

  • Monero, Dash, ZCash, Bytecoin, Komodo, ZCoin, ZenCash, Zclassic, Zoin, Aeon, CrypticCoin, Groestlcoin

PoS:

  • PivX, Spectre, Particl, Phore


Projects listed by launch year:

2012: Bytecoin

2014: Monero, Dash, Verge, NAV Coin, GroestlCoin, AEON

2016: Zcash, Komodo, PivX, Zcoin, Zclassic

2017: Zencash,

2018: Bitcoin Private, Crypticcoin



2. MOST USED PRIVACY MECHANISMS

The most popular privacy mechanisms and their functions:


RingCT

Uses a mixing technique to hide the sender and the amount of the transaction.


Stealth Adresses

Hides the receiver.


zk-SNARKs

zk-SNARKs (zero-knowledge Succinct Non-Interactive Argument of Knowledge) is a cryptographic privacy method, that allow for transactions to be acknowledged as correct, without revealing anything about them (e.g. the amount transferred).

A possible worrying point by some claims is, that zk-SNARK is quite inefficient, slow and costly, demanding 4GB of RAM for 1–2 minutes to send a transaction, which could be a scalability problem — an update to the zk-SNARKs protocol is in the works, and this should solve that problem.


Zerocoin

The Zerocoin Protocol works by multiplying two large prime numbers to get a resulting number, making it impossible for a computer to determine the original prime numbers. These prime factors are called the RSA numbers, which have not been cracked in more than 25 years, and at projected computing capacity it will be safe to use for decades.


OBFS4 / IP2 / TOR

Hides the IP-address


CryptoNote

CryptoNote includes a mixture of one-time stealth addresses and ring signatures to keep all transactions private.



3. PROJECT RUN-THROUGH


MONERO ($XMR)

Launch: April 2014 Origin: ByteCoin fork Algorithm: CryptoNight  Consensus Mechanism: PoW Circulating / Max. supply: 16M / ??? Market Cap: $2.7M Block Time: 2 min. Privacy mechanism: RingCT & Stealth addresses

TECH

Monero originates from a ByteCoin fork.

Monero is cryptographically private and heavily encrypted, amongst other using stealth adresses and ring confidential transactions (RingCT).

TEAM / COMMUNITY

The people behind Monero are volunteers, and the working developers are funded through the Forum Funding System, which the users contribute to.  It is a fully decentralized project, meaning everyone can participate in it, all decision and development processes are open, and the full code is available on GitHub.

ROADMAP

Monero’s developers are constantly upgrading the tech, and after adding RingCT in January 2017, the next planned upgrade will be Kovri, that will add an extra layer of privacy/security through several features, most prominently by hiding the link between IP-adresses and transactions.



DASH ($DASH)

Launch: January 2014 Origin: Bitcoin fork Algorithm: Decision Algorithm for Supportive Housing  Consensus Mechanism: PoW Market Cap: $2.5M Circulating / Max. supply: 8M / 18.9M Block Time: 2.5 Minutes Privacy Mechanism: CoinJoin

TECH

Dash is a fork of Bitcoin, that is not cryptographically private, but promises privacy through a function called PrivateSend, which is utilizing a modified version of CoinJoin — a method initially created to “anonymize” Bitcoins.

This method — like RingCT — uses mixing, to group together transactions, so as to obscure the origin of the different transactions.

Masternodes are performing the functions on the network like PrivateSend, and as it requires 1000 $DASH to run, it is practically very costly to disrupt the network… but as costly as it would be, it is possible for entities with sufficient means.

Furthermore there is nothing preventing the masternodes themselves from noticing the user’s output destinations, and on top of that masternodes are hosted on Visual Private Servers (VPS), and these providers could log information without the masternodes knowing.

Also having a partly private network is always a problem, as transactions could be traced when they happen from the private part of the network to the non-private.

Dash also has a function called InstantSend, that — surprise — makes transactions instant.

TEAM / COMMUNITY

Dash is community driven, but different parts of the community have a larger influence.

As Dash is utilizing masternodes, and these masternode have more power and influence than normal nodes, Dash is only partially decentralized.

Dash’s masternode owners and miners split the block rewards, but 10% goes to the Dash Treasury, which in turn distribute this wealth to people providing services for Dash eg. programming, marketing, graphic design or promotion.

The creator of Dash Evan Duffield is rumoured to have instamined the first million or so coins to him self when launching the cryptocurrency, but I haven’t been able to find any proof for this, and there is always a lot of rumours, so wouldn’t take that to seriously.

ROADMAP

The Dash community are really trying to push for mass adoption of their project, and are currently handing out free tokens to new users in Venezuela — if they start getting a hold of 3rd world countries with unstable economies, that would be a game changer.



VERGE ($XVG)

Launch: October 2014 Origin: Bitcoin clone / former name: DogeCoinDark Algorithm: Scrypt, x17, groestl, blake2s, & lyra2rev2 Market Cap: $976.6M Circulating / Max. supply: 14.850 Bn / 16.555 Bn  Block Time: 30 Seconds Privacy Mechanism: I2P-routing (RingCT integration on the roadmap)

TECH

Verge is not cryptographically private, but simply just offers a privacy solution using Tor and I2P routing, concealing traffic and the user’s IP address’s.

There are no privacy features, and all information is openly available on the ledger, so if you know someones address, you can view his balance and transactions.

TEAM / COMMUNITY

Verge is a Bitcoin clone, and is therefore fully decentralized — there is no company behind the project.

ROADMAP

Roadmap is impressive, looking to integrate smart contracts and RingCT.

However has been some strange communications about this here, but not sure if this is directly from their team…



ZCASH ($ZEC)

Launch: October 2016 Origin: Built on Bitcoin Core Algorithm: Equihash  Consensus Mechanism: PoW Circulating / Max. supply: 3.6M / ??? Market Cap: $672M Block Time: 2.5 Minutes Privacy mechanism: zk-SNARKs

TECH

ZCash is built on Bitcoin Core, and is using zk-SNARKs for privacy.

ZCash is offering this privacy layer as an option, but transactions are NOT private by default, why you will have to actively choose the privacy for it to be working.

This is not a problem per se, but could make it easier to find out about the private transactions, that stand out from the normal transactions on the blockchain, or when tokens from private transactions are transferred to the open non-private area of the blockchain.

TEAM / COMMUNITY

ZCash is run by the US-based Zerocoin Electric Coin Company, headed by a CEO and looking to make profit, why it is not a fully decentralized project.

The company takes 20% of all coins for the first four years as a founders reward.

Zcash is sponsored by some really remarkable corporate/government entities, notably the U.S. Defense Advanced Research Projects Agency (DARPA), the Air Force Research Laboratory (AFRL), the Israeli Centers of Research Excellence I-CORE program, and the Israeli Ministry of Science and Technology.

ROADMAP

Overwinter will be the first network upgrade for ZCash on June 25, 2018:

Its purpose is strengthening the protocol for future network upgrades. It includes versioning, replay protection for network upgrades, performance improvements for transparent transactions, a new feature of transaction expiry, and more.



BYTECOIN ($BCN)

Launch: July 2012 Origin: Written from scratch Algorithm: CryptoNight Consensus Mechanism: PoW Market Cap: $419M Circulating / Max. Supply: 183.8M / 184.5M Privacy mechanism: CryptoNote

TECH

Bytecoin was created in 2012, and is one of the oldest cryptocurrencies.

Bytecoin uses the CryptoNote protocol to keep privacy.

TEAM / COMMUNITY

The coin has a history of split developer camps, numerous forks, and an uncertain beginning but this seems to have recently changed. The current development team has a renewed focus on transparency and communication with the community and has created a targeted roadmap.

There are some that believe, that the creators pre-mined coins for themselves first, why they could hold an unfair advantage/power.

ROADMAP

Roadmap includes both marketing and technical updates.



KOMODO ($KMD)

Launch: September 2016 Origin: Evolved form Bitcoin Dark / ZCash fork Algorithm: Equihash Consensus Mechanism: PoW Circulating / Max. supply: 104M / ??? Market Cap: $275M Block Time: 1 min. Privacy mechanism: zk-Snark

TECH

Komodo evolved from Bitcoin Dark but forked from Zcash, and is therefore — like Zcash — using the zk-Snark protocol, but have implemented another proof of algorithm for security reasons.

Komodo is the leading project when it comes to atomic swaps, and have some really impressive numbers when it comes to handling transactions — looking to be able to handle 20.000 tx/sec which is pretty impressive.

TEAM / COMMUNITY

Big and active team behind this one, covering both management, development and brand/marketing.

ROADMAP

Komodo is not only for private transactions though, but are mostly focused on building a decentralized exchange w/ cross chain atomic swaps amongst other functions.

Lots of things in the works, and first dICO will be hosted on their platform soon with the project blocnation.io, which is an already working company, with a cashless payment system for festivals and events.



PIVX ($PIVX)

Launch: November 2016 Origin: Formerly DarkNet / Zcash fork Algorithm: BTC Core 0.10.x, BIP38  Consensus Mechanism: PoS Circulating / Max. Supply: 56M / ??? Market Cap: $223.902.963  Block Time: 60 Seconds Privacy mechanism: Zerocoin

TECH

PivX is a fork from Dash, which — unlike Dash — is using PoS.

PivX was the first PoS cryptocurrency to implement Zerocoin protocol.

PivX has instant transactions through the SwiftTX implementation.

TEAM / COMMUNITY

PivX works similar to Dash, so as users can run masternodes to support the network — 1 masternode requires 10.000 $PIVX.  Users are therefore a big part of running PivX, and also has their say when it comes to planning future developments.

ROADMAP

There’s some interesting items on the roadmap, including: zDEX a decentralised exchange and an iOS wallet currently awaiting approval from Apple.



ZCOIN ($XZC)

Launch: September 2016 Origin: Bitcoin Core Algorithm: Lyra2RE  Consensus Mechanism: PoW Circulating / Max. Supply: 4.5M / 21.4M Market Cap: $131M Block time: 10 min. Privacy mechanism: Zerocoin

TECH

ZCoin is a fork from Bitcoin, and is utilizing the Zerocoin protocol for privacy.

TEAM / COMMUNITY

ZCoin functions with a trusted setup, that gives some trusted people certain powers, and they could actually mint as much coins as they want (like ZCash).

Developers are though saying, that they are working on removing this trusted setup.

ROADMAP

Zcoin have an impressive roadmap, with planned upgrades and an Ethereum port & interledger connectivity in the works.



PARTICL ($PART)

Consensus Mechanism: PoS Market Cap: $119.5M Circulating / Max. Supply: 9M / ??? Privacy Mechanism: RingCT

TECH

RingCT for privacy, cold-staking, and nice wallets on various platforms

TEAM / COMMUNITY

Not the biggest community, but hardworking developers — team consists of 21 people and they are hiring.

ROADMAP

Aims to launch a decentralized marketplace.



ZEN CASH ($ZEN)

Launch: May 2017 Origin: ZCash fork Market Cap: $86M Circulating / Max. supply: 3.6M / 21M Privacy mechanism: zk-Snark

TECH

ZenCash is another fork of Zcash that uses the zk-Snark protocol.

ZenCash started with the intention of building the best possible privacy currency, but quickly realised that they could do much more, and started work on a privacy orientated platform.

So they launched Secure Node network in November last year in order to gain a foundation to start building applications on top of.

Recently they announced their new Super Node tier which requires higher stakes and greater computing power.

Super Node will significantly increase network size and capability putting us up with the most decentralised projects in the world.

At present they’re fast approaching the node count of Bitcoin except their nodes aren’t wallets like they are in the BTC network — instead nodes are dedicated virtual private and bare metal servers.

THE PEOPLE BEHIND

Team of 50 people trying to set themselves up to be the most decentralised and censorship resistant organisation in the world.

ROADMAP

ZenCash have already completed 80% of their whitepaper, so they’re releasing a bunch of product specific papers in the coming month or 2.

Wallets, DAO Treasury and scalability-solutions in the works.

Planning to launch ZenHide which is a domain fronting service to allow users free access to the internet through the network of nodes, no matter where they are based in the world. This is specifically designed for places like China that don’t have access to the free web thanks to the great firewall.

Then planning to launch ZenPub which aims to restore freedom of speech by allowing anonymous publishing through their network of nodes.

Then planning to launch ZenGrid which allows the ZenCash network to rent out it’s computational power to organisations that require vast computing power which will provide additional revenue for the node operators.



NAV COIN ($NAV)

Launch: July 2014 Origin: Built on Bitcoin Core Algorithm: X13 Consensus Mechanism: PoW Circulation / Max. supply: 62.6M / ??? Market Cap: $54M Privacy mechanism: OBFS4 / RSA

TECH

NAVCoin doesnt use cryptography for privacy, but instead use obfuscation techniques through NavTech servers (which are not yet distributed enough), with a sub-blockchain in parallel to the main blockchain.

Using obfuscation through its own servers, makes NAVCoin a centralized system, which therefore is liable to attacks on the users privacy.

This is trying to be solved by implementing the NavTech servers in a full node, which would give the coin the needed distribution and decentralization.

Privacy is an opt-in, why you have to choose it.

NAVCoin has payment systems for business and app-use.

NAVCoin is PoS.

TEAM / COMMUNITY

NAVCoin have a strong team & community.

ROADMAP

There is an impressive roadmap, with e.g. the implementation of Lightning Network and the creation of a Community Fund in the works.



GROESTL COIN ($GRS)

Launch: March 2014 Origin: Bitcoin fork Algorithm: Grøstl Consensus Mechanism: PoW Market Cap: $47M Circulating / Max. Supply: 70M / 105M Block time: 1 min.

TECH

GroestlCoin is focusing on private and fast+cheap transactions.

They were the first to introduce SegWit, and be ready for Lightning Network.

TEAM / COMMUNITY

The developers seem to be killing it, with lots of wallets and integrations, posting updates every 3 months of how things are developing.

All team members have chosen to have private identities.

ROADMAP

Lots coming, very eager developers.



AEON ($AEON)

Launch: June 2014 Origin: Monero fork Algorithm: CryptoNight-Lite  Consensus Mechanism: PoW Market Cap: $24.4M Circulating / Max. Supply: 15.7M / 18.4M Block Time: 4 min. Privacy Mechanism: Ring signatures / CryptoNote

TECH

Ring signatures and cryptograhic system for transfering funds.

TEAM / COMMUNITY

The project is from 2015, and the team brands it as the lightweight Monero.

ROADMAP

Couldn’t find any.

Bonus info: Couldn’t find much on this project, and couldn’t get a hold on the team behind (was refered to a chat on a site i dont know). If somebody gets in touch with me, i will update this section.



ZLASSIC ($ZCL)

Launch: November 2016 Origin: Built on Bitcoin Core Algorithm: Equihash  Consensus Mechanism: PoW Circulating / Max. supply: 3.7M / 21M Market Cap: $15M Block Time: 2.5 Minutes Privacy mechanism: zk-SNARKs

TECH:

Zclassic is basically the same thing as Zcash only 100% of the coins mined go to the miners instead of 20% going to the founders.

TEAM / COMMUNITY:

ROADMAP:



ZOIN ($ZOI)

Origin: BTC core 0.13 Algorithm: lyra2zoin  Consensus Mechanism: PoW Market Cap: $13.9M Circulating / Max. Supply: 17.5M / 21M Block Time: 2.5 min Privacy Mechanism: Zerocoin / RSA / OBFS4 / Tor

TECH

Zoin utilizes the Zerocoin Protocol to achieve complete anonymous and untraceable transactions.

Zoin has masternodes (25k) used to confirm zerocoin transactions — there are 182 active nodes, with 38% ROI.

TEAM / COMMUNITY

Zoin is a community-governed cryptocurrency, as the community took over the project after it was abandoned by the original dev(s).

In the near future, major decisions will be made by the community as a whole. This will be done through voting, which will be integrated in the official wallets.

The Zoin team has been very active. Their latest additions were a TOR enabled button in the core wallets, OBFS4 support and the creation of a TOR web wallet, first of its kind, that also handles the Zerocoin Protocol.

ROADMAP

Release of mobile wallets, for Android and iOS, and more exchange listings in the works.

I’ve been talking with the very helpful team behind, and they are really excited about the release of a new white paper/roadmap in a few weeks time, with some major updates.

Bonus info: Already seems to have gained popularity in some parts of the darknet and getting some heavy shilling on Twitter.



PHORE ($PHR)

Origin: Fork from PivX / Swap from KryptKoin ($KTK) Algorithm:  Consensus Mechanism: PoS Market Cap: $9.5M Circulating / Total Supply: 7.3M / 12.7M Block Time: 1 min. Privacy mechanism: Zerocoin

TECH

Phore is a fork from PivX, why it is using the Zerocoin protocol.

The tech is a blockchain ecosystem consisting of a handful of services and features, including a decentralized marketplace.

TEAM / COMMUNITY

The developers seems active and hardworking, and they have released their decentralized marketplace in open beta here.

ROADMAP

Phore are also planning to introduce smart contracts, atomic swaps and VR/AR functionality.



SPECTRE COIN ($XSPEC)

Origin: ShadowCash Algorithm:  Consensus Mechanism: PoS Market Cap: $6.5M Circulating / Max. Supply: 20.8M / 20.8M Block Time: 1 min. Privacy Mechanism: RingCT / Stealth addresses / Tor / OBFS4

TECH

SpectreCoin is using RingCT & stealth adresses for privacy, and Tor+OBFS4 layer for IP obfuscation.

SpectreCoin is PoS.

Transaction time is only 30 sec, and there are no transaction fees.

TEAM / COMMUNITY

Impressive community with a strong development team.

ROADMAP

There were some problems with the leading developer jbg, who didn’t meet some promised goals (regarding implementation of stealth addresses) — team tells me that he has now quit, and the founder Mandica is back in charge, and things should be on track — time will tell.

From website: “..roadmap that prioritises privacy, security, and true decentralisation with features such as default stealth addresses and stealth staking, and low-power mobile wallet staking in our upcoming Android wallet.



SUMO COIN ($SUMO)

Origin: Monero fork Algorithm: Market Cap: $3.4M Circulating / Max. Supply: 2.8M / 88.9M Block Time:  Privacy Mechanism: RingCT

TECH

Sumo Coin is a hard fork from Monero, and uses — like Monero — Ring Confidential Transactions (RingCT) technology, making the users identity anonymous.

Sumo Coin have added a big RingSize of 13, which should make the network more secure.

They have also changed to block reward to a camel pattern.

They added an enhaned difficulty algorithm, which should make it more decentralized / miner friendly.

TEAM / COMMUNITY

The team consists of 4 developers/founders.

Some discontent with the founders taking a 10% premine.

ROADMAP

Different wallets in the works.



BITCOIN PRIVATE ($BTCP)

Origin: Bitcoin/Zclassic fork Algorithm: Equihash Circulating / Max. Supply: ??? / 21M Block time: 2.5 min Privacy mechanism: zk-SNARKs

TECH

ZClassic and BTC were co-forked into BitcoinPrivate.

BitcoinPrivate uses zk-SNARKs protocol for privacy.

BitcoinPrivate have increased the block size a small amount from Bitcoins.

TEAM / COMMUNITY

From webpage:  “Bitcoin Private is a community-driven BTC/ZCL fork consisting of over 50 talented contributors currently. We are fully transparent to the community and often allow them to make decisions regarding the fork and the future of Bitcoin Private.”

Furthermore there was no pre-mine or founders reward, and BitcoinPrivate is fully decentralized.

ROADMAP

There’s an exchange listing on HitBTC in the works (confirmed by the exchange), but more than that the team seems to be busy getting the network up and running for now.



CRYPTICCOIN

Launch: March/April 2018 (launch ongoing) Consensus Mechanism: PoW Circulating / Max. Supply: 7.600 / 7.600 Block Time: 30 sec. Privacy mechanism: Mixing / ZeroCash / stealth addresses / OBFS4 / Tor

TECH

CrypticCoin is using an array of different techniques to provide privacy, including mixing, ZeroCash Protocol and Tor-IP hiding technique, that essentially hides your IP address when dealing with your Cryptic Coins.

TEAM

Have been talking with the team, and they seem active in development and marketing/promotion.

ROADMAP

Mobile wallets and smart contracts in the works, also a desktop wallet based on electrum for Windows, MacOS and Linux.

Bonus info: This coin will be given free of charge for a limited time — they call it an FCO (Free Coin Offering) all you have to do is register at their site, follow them on twitter/telegram, and be ready when they drop tokens.



3. CONCLUSION

The privacy coin sector is well alive and thriving, with a lot of interesting projects, both new and old.


For me it seems to be maybe the most deciding factor, whether the projects seem to go completely dark — like fx Monero — or have the privacy layer as an opt-in — like fx ZCash.


The ones that go completely dark have the advantage of being really private, but might get more and more regulated on (or even banned), since governing bodies mostly do not like this coins.


The ones that have privacy as an opt-in, are probably not as private, but might do better in the markets, since they will be more accepted by governing bodies.

© 2018 af Jens Ibsen & Johan Stockmarr