Usually, when people think of the crypto world, the word „privacy“ comes to their heads. After all, if the operations are anonymous and encrypted, doesn’t that mean they’re totally private? The reality is a little more complicated, and that is that even cryptosystems like Dash and Zcash are not truly private in their entirety. Since they can be tracked using tools like Chainalysis.
Does Blockchain Technology destroy our privacy?
Privacy in the crypto world
Since CryptoTrend we have always had a strong commitment to the truth. That is why we have dedicated several articles to explain the issue of privacy in the crypt world. And how, despite the fact that there is encryption and privacy for users of Bitcoin, Zcash, Dash and other virtual currencies. The operations performed on their strings can still be traced.
This is thanks to one of the best features of the Blockchain technology. We are referring to its transparency, which allows all the operations performed in the Crypto Trader to be reflected in it forever. So even when the operation does not appear the name of those involved, only the address of your wallet. Transactions can be tracked by police forces, if they are properly trained to do so.
So, despite Bitcoin’s encryption and ease of use. Only a relatively small proportion of your transactions are used for criminal activity. And, they can be identified and tracked by the police. Making BTC a secure, yet more private, crypto currency than traditional financial transactions.
This, of course, can be uncomfortable for some users, who have preferred to migrate to crypto currencies such as Zcash and Dash. These are presented as totally private virtual currencies that will protect your identity from anyone, unlike Bitcoin.
Tyler Winklevoss denounces Goldman Sachs‘ double standard with Bitcoin
Zcash and Dash: Really private?
However, we should start by clarifying that, although Dash and Zcash have more advanced privacy features than Bitcoin. The truth is that they are optional, so only a small number of their users use them.
In the case of Dash, the option to keep transactions private is known as Private Send. This works similarly to the Bitcoin CoinJoin protocol. It basically groups several money transfers into a single transaction, and then distributes the money in equal amounts to several recipients. Which makes it difficult to relate each sender to each receiver. Currently only 9% of Dash users use Private Send.
In Zcash’s case, they have a more complicated system known as Shielding. This would consist of several pools of encrypted accounts. The transactions that are made to the pool, or from the pool to another account, are public. But you never know who is the counterparty within the pool that receives or sends the money. And as with Dash, this feature is optional for users, with 14% of them using it.