The blockchain, which is a type of distributed ledger technology (DLT), is used to share transaction data among a crypto network’s participants. Unlike the money transfers recorded on a bank’s ledger, which may only be viewable to the institution’s employees, the transaction details of most crypto transactions conducted on public blockchains are accessible to everyone.
In order to make cryptocurrency transfers more private, digital assets such as Monero (XMR), Dash (DASH) and Zcash (ZEC) may be used to reliably conduct P2P (Peer-to-Peer) transactions.
- Monero is a privacy coin that uses advanced cryptography techniques to shield the addresses of both the sender and the recipient in an XMR-based transaction.
- Zcash also lets users perform shielded
transactions which are controlled through a “z-addr.” The Zcash network also
provides the option to conduct “transparent” transactions with its native ZEC
cryptocurrency.
- Dash (DASH), an open-source cryptocurrency that
is managed by a subset of its network participants, called masternodes (or
transaction validators), also allows users to conduct fast and untraceable
transactions.
Source: MV Index Solutions.
Many crypto investors prefer P2P transactions in order to avoid having their private details publicly available to anyone. On the other side, however, regulatory authorities are concerned that confidential digital currency payments may be used to conduct illicit activities.
About the Author:
Quynh Tran-Thanh joined CryptoCompare three years ago to build data products and has been since responsible for quantitative methods, methodologies and research within the business. Previously she worked in investment banking as a quant analyst for credit derivatives.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.