What to Know Before Trading Monero

While hundreds cryptocurrencies have been launched and many have attempted to provide users with greater privacy, they have seen varying levels of success.

Bitcoin, the first cryptocurrency, was originally touted as providing users with anonymity. The cryptocurrency’s protocol attempted to offer a high level of privacy by shielding user identities behind pseudonymous addresses, randomly generated strings of numbers and letters. However, this approach proved ineffective.

Bitcoin addresses and transactions are both recorded on the blockchain, making them publicly available. Even though an individual bitcoin address is pseudonymous, it can attach to many transactions over time, making it easier for friends, family and even government agencies to get a better sense of the address owner’s purchasing trends.

While some thought that bitcoin kept their transaction history completely private, organizations such as law enforcement agencies have used blockchain analytics to track bitcoin transactions.

In the years after bitcoin was released, certain cryptocurrencies were developed specifically to provide users with a greater chance of remaining anonymous. Dash, for example, harnesses a feature based on CoinJoin, which combines funds from several users to reduce the chances that any one user’s identity will be detected.

Zcash, another privacy oriented cryptocurrency, leverages zero-knowledge proof constructions called zk-SNARKs to allow users

Read more ... source: CoinDesk

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