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:
- An overview of the current crypto-privacy projects
- An overview of the most used privacy mechanisms
- A run through of the different projects
- A conclusion
1. LIST OF PRIVACY PROJECTS
The different 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: ???
Projects listed by consensus mechanism:
PoW:
Monero, Dash, ZCash, Bytecoin, Komodo, ZCoin, ZenCash, Zclassic, Zoin, Aeon, 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
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: $976.6M
Circulating / Max. supply: 14.850 Bn / 16.555 Bn
Block Time: 30 Seconds
Privacy Mechanism: I2P-routing (RingCT integration on the roadmap)
TECH
Verge is not cryptographically private, but simply just offers a privacy solution using Tor and I2P routing, concealing traffic and the user’s IP address’s.
There are no privacy features, and all information is openly available on the ledger, so if you know someones address, you can view his balance and transactions.
Also the network was recently hijacked, which pressured Verge to do a hardfork.
Verge recently announced a partnership with Mindgeek / Pornhub, and are in general putting an emphasis on marketing and partnerships.
TEAM / COMMUNITY
Verge is a Bitcoin clone, and is therefore fully decentralized — there is no company behind the project.
Very strong community lots of bagholders and believers.
ROADMAP
Roadmap is impressive, looking to integrate smart contracts and RingCT.
However has been some strange communications about this here, but not sure if this is directly from their team…
ZCASH ($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: $86M
Circulating / Max. supply: 3.6M / 21M
Privacy mechanism: zk-Snark
TECH
ZenCash is another fork of Zcash that uses the zk-Snark protocol.
ZenCash started with the intention of building the best possible privacy currency, but quickly realised that they could do much more, and started work on a privacy orientated platform.
So they launched Secure Node network in November last year in order to gain a foundation to start building applications on top of.
Recently they announced their new Super Node tier which requires higher stakes and greater computing power.
Super Node will significantly increase network size and capability putting us up with the most decentralised projects in the world.
At present they’re fast approaching the node count of Bitcoin except their nodes aren’t wallets like they are in the BTC network — instead nodes are dedicated virtual private and bare metal servers.
TEAM / COMMUNITY
Team of 50 people trying to set themselves up to be the most decentralised and censorship resistant organisation in the world.
ROADMAP
ZenCash have already completed 80% of their whitepaper, so they’re releasing a bunch of product specific papers in the coming month or 2.
Wallets, DAO Treasury and scalability-solutions in the works.
Planning to launch ZenHide which is a domain fronting service to allow users free access to the internet through the network of nodes, no matter where they are based in the world. This is specifically designed for places like China that don’t have access to the free web thanks to the great firewall.
Then planning to launch ZenPub which aims to restore freedom of speech by allowing anonymous publishing through their network of nodes.
Then planning to launch ZenGrid which allows the ZenCash network to rent out it’s computational power to organisations that require vast computing power which will provide additional revenue for the node operators.
NAV COIN ($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: $15M
Block Time: 2.5 Minutes
Privacy mechanism: zk-SNARKs
TECH:
Zclassic is basically the same thing as Zcash only 100% of the coins mined go to the miners instead of 20% going to the founders.
ZOIN ($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)
Launch: 2016
Origin: ShadowCash
Consens. Mechanism: PoS (v3)
Market Cap: $6.5M
Circulating / Max. Supply: 20.8M / 20.8M
Block Time: 1 min.
Privacy Mechanism: RingCT / Stealth addresses / Tor / OBFS4
TECH
SpectreCoin is using RingCT & stealth adresses for privacy, and Tor+OBFS4 layer for IP obfuscation.
SpectreCoin is PoSv3, staking rewards equates to about 10% per annum.
Transaction time is only 30 sec, and there are no transaction fees.
TEAM / COMMUNITY
I have had good communications with the team, and they seem professional and eager.
There were some problems with the leading developer jbg, who didn’t meet some promised goals (regarding implementation of stealth addresses) — team tells me that he has now quit, and the founder Mandica is back in charge, and things should be on track.
Overall i would say impressive community with an engaged team.
Every project will have problems, and it’s how the team/ community deal with those problems, that shows the real character of the people behind. Being open and honest and correcting wrongs, is a strong sign imo.
ROADMAP
Stealth staking to be implemented + Low-power mobile wallet staking in their upcoming Android wallet.
The NCC group is currently doing a code audit (The NCC Company is famous in Crypto-world, and did code review and audit for ZCash — once the code audit is completed the new roadmap will be released.
There is also a new website and exchange listings coming.
SUMO COIN ($SUMO)
Origin: Monero fork
Algorithm: Cryptonight-Heavy
Market Cap: $3.4M
Circulating / Max. Supply: 2.8M / 88.9M
Block Time:
Privacy Mechanism: RingCT
TECH
Sumo Coin is a hard fork from Monero, and uses — like Monero — Ring Confidential Transactions (RingCT) technology, making the users identity anonymous.
Sumo Coin have added a big RingSize of 13, which should make the network more secure.
They have also changed to block reward to a camel pattern.
They added an enhaned difficulty algorithm, which should make it more decentralized / miner friendly, as it should now be ASIC resistant for a long time
TEAM / COMMUNITY
The team consists of 4 developers/founders.
Some discontent with the founders taking a 10% premine.
ROADMAP
Different wallets in the works.
BITCOIN PRIVATE ($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.
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 secure, but might do better in the markets, since they will be more accepted by governing bodies.
Please let me know if you find some errors, or i misrepresented some project! This article is covering a lot of projects, and i might not get everything completely right! .. And thanks for reading!