Anonymity crypto currency - a reality or a myth?

Crypto currency has attracted attention, first of all, as a means of anonymous payment. Many users who value their rights and personal freedoms have bought into this very anonymity, not fully understanding that the crypto currency discloses much more data than the fiat currencies. Is digital money not able to store the secrets of transactions and give out their users red-handed? Most coins do just that, but there are other crypto currencies that value our personal space and security. We'll talk about those and others in this article.

What is the crypto currency pseudo-anonymity?

Satoshi Nakamoto did not deceive us a bit, saying that bitcoin is anonymous currency. At the same time, the creator of the first crypt allowed a fatal inaccuracy in his definition and did not mean at all that you can buy drugs and weapons for bitcoins, and for this you will not have anything. Under anonymity, it was only the absence of the need to provide any data about yourself. In simple terms, the process of buying bitcoins from you will not require a passport, the provision of an address for a residence permit and a declaration of income. Nevertheless, the very essence of the crypto currency entails deanonymization of users.

Crypto-currencies work on the block, which is a database. In this database, you can view the operations of absolutely any user, and you do not need to be a financial genius to trace the transaction chain and find out where and how many coins were sent. If the user is not careful, then all information about him can be disclosed. To do this, it is enough to make a purchase in an online store and pay the account with bitcoins or trivially withdraw funds from the exchange offline.

In fact, we have the following - crypto currency is anonymous until the user issues himself. That is, in fact there is anonymity, but it does not seem to exist. Fortunately, anonymous crypto-currencies have replaced the generation of pseudo-anonymous coins, which you will learn about later, but for now we need to understand whether we need anonymity on the net or maybe it's not so important?

Why anonymity to the user crypto currency?

Many consider anonymity in financial transactions to be something not so important, and very vain. On the one hand, we are accustomed to living in a centralized, bureaucratic world, and the fact that our whole life activity is under someone's vigilant control is not surprising to anyone. But there is little good here, because such a state of affairs infringes on us in every way, and at times even harms not only well-being, but also life. What good is that any attacker can make inquiries about your financial situation and be enriched at your expense?

Even if we are not engaged in money laundering, selling illegal substances and other illegal frauds, this does not mean that you can deanonimize yourself and sleep peacefully. Today every sensible person should strive for freedom in all senses, and financial in the first place. In the end, this is a security pledge.

Fundamentally about the security of personal data in the network spoke after a series of arrests of those who did not earn money honestly through bitcoins. The public realized that no one is immune from observing transactions in the Bitcoin network and, perhaps tomorrow, your transaction for a few bitcoins will seem suspicious to someone. Do not forget that the so-called dirty bitcoins walk around the net, which are related to thefts on stock exchanges, the purchase of drugs, etc. Who knows, maybe the coins from this list are already in your wallet?

Anonymous crypto currencies

Developers of coins of the last generation came to the fact that the urgent problem of pseudo-anonymity in the crypto-currency world must be solved. This was for them an excellent reason to beat the bitcoin in something and the real "arms race" began. Today we can state the appearance of several popular currencies, in the development of which anonymity was paid special attention.

Monero

The coin issued in 2014 year, loudly declared itself that it is anonymous and, probably, therefore, entered the TOP on capitalization. Today, Monero has secured 9 place in the rating of Crypto-currency and is actively used for confidential transactions. Unlike bitcoin, which both the code and user operations are visible, as in the palm of your hand, Monero has basically a system of obfuscation, that is, code confusion. This greatly complicates the analysis of the code, but does not affect its functionality in any way.

Nevertheless, it is impossible to call the Montero crypto currency completely anonymous. Information about transactions is recorded in the block system, albeit in a distorted form, which allows, in the presence of capacities, to partially deanonize some operations. This is unlikely, because an attacker must control a large part of the network, but the fact remains.

Dash

Darkcoin, XCoin, Dash - names of the same crypto currency, which is focused on the anonymity of transactions and uses the Darksend mechanism. Its essence boils down to the fact that information about transactions is recorded in the locker, but the user can choose the blending option and its intensity - your coins can be mixed with coins of other users up to 8 times, and if this seems to you little, you can repeat the operation still time. In general, such a scheme is quite working and provides the necessary confidentiality, but, theoretically, it is possible to calculate the chain of transactions, because there is information about them in the blockade, albeit in an intricate way.

Zcash

A very young coin called Zcash is the first truly anonymous crypto currency. If in the above-described options the payment data is included in the block account, in the case of Zcash this information remains unmentioned. The coin was born quite by chance, because initially, it was not planned to create a new crypto currency, but only an addition to bitcoin, which would allow performing completely anonymous operations based on the ZeroCash protocol. This very protocol offered zero disclosure about the transaction, which became the basis for an anonymous monetary unit.

The protocol, on the basis of which Zcash works, contains a brilliant in its simplicity mathematical concept. It boils down to the fact that to confirm the transaction it is enough to know that it was, the rest of the information about it should not be disclosed. As a result, the Zcash blockage has an imprint of the fact that the payment was made in the network, but information about how many coins, where and where they went from, is not provided. Thus we have complete anonymity, which even hypothetically can not give out any information - it simply does not exist.

How to keep anonymity on the Bitcoin network?

The market of crypto currency is expanding, there are more confidential coins, but what about those who continue to want to deal only with bitcoin and do not recognize his fellow men? There is an exit, moreover, only on you depends on how anonymous your operations will be. To protect your personal data and not become a victim of intruders or federal authorities, follow these rules:

• When dealing with bitcoins, use TOR and other services to hide your IP address.
• For each transaction, create a separate bitcoin-address - this will complicate the identification of the person, and it will be impossible to calculate the number of coins in your possession.
• Use bitcoin mixers, which mix their users' funds for a small commission. Finding "your" coins after such mixing will be extremely difficult, but there is a risk of running into an unscrupulous service that can simply misappropriate your money.
• If you want to be anonymous, it's better not to pay bills in online stores that require personal data (for example, in the case of delivery of the purchased goods by mail). In this case, it is better to give preference to fiat money, and your anonymity in the network bitcoin will remain intact.

Crypto currency, even though it struck the face in the mud, was not as anonymous as it was supposed to be, but there are plenty of opportunities to keep its data untouchable when it is used. If you do not want to give preference to more anonymous currencies than bitcoin, then it is realistic to keep the information about yourself secret, showing caution, which will never be superfluous.