What is Privacy Coin?
A cryptocurrency designed with built-in privacy features that hide transaction amounts, sender and receiver addresses, or both.
Privacy coins implement privacy at the protocol level, making private transactions the default rather than an option.
Major Privacy Coins
- Monero (XMR): Ring signatures, stealth addresses, RingCT. The most established privacy coin.
- DERO: Homomorphic encryption, private smart contracts. Balances and data are never decrypted on-chain.
- Zcash (ZEC): Zero-knowledge proofs (zk-SNARKs). Privacy is optional (shielded transactions).
- Pirate Chain (ARRR): Mandatory shielded transactions using Zcash technology.
Why They Matter
- Bitcoin and Ethereum are pseudonymous, not anonymous — transactions are publicly traceable
- Chain analysis firms routinely de-anonymize Bitcoin users
- Privacy coins make surveillance of transactions infeasible
Regulatory Pressure
- Several exchanges have delisted privacy coins under regulatory pressure
- Some countries have banned them
- Privacy advocates argue they're essential for financial freedom
- The tension between surveillance and privacy remains unresolved
Related Terms
Homomorphic Encryption
A form of encryption that allows computations to be performed on encrypted data without decrypting it first, preserving privacy during processing.
Ring Signatures
A cryptographic technique that allows someone to sign a message on behalf of a group, making it impossible to determine which group member actually signed.
Stealth Address
A technique where the sender generates a unique, one-time address for each transaction, preventing observers from linking transactions to the receiver.
Zero-Knowledge Proof
A cryptographic method by which one party can prove to another party that they know a value, without conveying any information apart from the fact that they know the value. This allows authentication and verification without exposing sensitive data.
Have more questions?
Use our guided flow to get the right next privacy step for Privacy Coin.
Open Guided Flow