Formally known as Monero vs DASH vs Zcash vs Verge vs Bitcoin Mixers.
Not all privacy-centric coins can deliver 100% privacy, untraceability, security and fungibility in a 100% decentralized coin with a trustless setup. Here's what these attributes are and why they're important:
- Your finances are not visible to the public. A person looking at the coin's blockchain won't be able to see how much money you have.
- The coins can't be traced through blockchain analysis or blockchain monitoring.
- All transactions are encrypted and the wallet which holds your funds is encrypted.
- All coins are equal and have the same value.
- All nodes (a node is a running instance of the coin's blockchain) of the network are equal. There is no superclass of nodes which have more influence or control over transactions or the system than other nodes.
Here is an analysis of well-known cryptocurrencies which claim anonymity and/or untraceability as their key differentiator. Bitcoin itself is not within the scope of this analysis since it's never claimed to be anonymous.
This site was made by Monero users. There was a time when we weren't Monero users but were concerned about financial privacy. We researched the coins which claimed to be private and this page is the result of our research. It's why we chose Monero over the rest. So, if we appear to be biased, we are, but we believe that bias is based on facts which you can read below and verify for yourself.
Select a logo to jump to that coin's analysis.
|Bitcoin mixers||No||No||Not completely||No||No|
- Monero uses a cryptographically sound system that allows you to send and receive funds without your transactions being publicly visible on the blockchain (the distributed ledger of transactions). This ensures that your purchases, receipts, and other transfers remain private by default. The sender, receiver and amount of the transaction are all private. Some coins have a "rich list" which allows anyone to see which account has the most coins. Since Monero is private, a Monero rich list can't exist.
- By taking advantage of ring signatures (a special property of certain types of cryptography), Monero enables untraceable transactions. This means it's ambiguous which funds have been spent, and thus extremely unlikely that a transaction could be linked to particular user.
- Using a distributed peer-to-peer consensus network, every transaction is cryptographically secured. Individual accounts have a 25-word mnemonic seed displayed when created, which can be written down to back up the account. A password is mandatory when creating a wallet, and account files are encrypted with a passphrase to ensure they are worthless if stolen.
- All coins are equal and have the same value. A user, vendor, or any other entity can't block or blacklist certain Monero coins since the transaction history of Monero coins is ambiguous.
- All Monero nodes are equal. There is no superclass of nodes which have more influence or control over transactions than other nodes. No person or entity can trace transactions by owning multiple nodes. Additionally, there is no trusted setup. This means that the need to trust a person or entity is not a factor. The only things that need to be trusted are the source code (which can be verified by anyone) and math.
Monero has been 100% open source from its inception, meaning anyone can view the software's source code to verify that no backdoors exist and that the software is secure.
Monero also has peer-reviewed research papers which mathematically and systematically verify all of its properties listed above.
DASH has a rich list, so this is not a private coin. The financial details of coin addresses are visible to anyone examining the blockchain.
DASH isn't cryptographically private at all. Actually I had a slide in the deck that was like 'DASH, LOL,' and like nothing else… it's snakeoil and I'm just sort of beside myself about it, personally.
Peter Todd, another Bitcoin Core developer and cryptographer, has made a similar statement.
- Transactions are routed through a series of Masternodes to make them untraceable. This practice might work if all masternode operators had only pure motives. However, if a government, group of hackers, other entity, or even an individual bought many masternodes (there would be no way to know if this occured) and if the transaction passed through a route where all of the masternodes were owned by that entity, then the transaction could be traced by that entity. Given the relatively low cost of masternodes and the enormous budget of governments and some organizations, the possibility that coins can be traced is real.
- Transactions are cryptographically secure.
- Since transactions are not private, the potential exists for an entity to block or blacklist certain coins, making them less valuable than the others. See the note on the lack of Bitcoin fungibility below since the same principle applies to DASH.
- Not all DASH nodes are equal. There is a superclass of nodes, called Masternodes whose owners have more influence over the system than regular node operators. This makes DASH semi-centralized instead of the ideal 100% decentralized system.
Zcash transactions are visible on their blockchain. They do enable hidden transations, but less than 10% of transactions are hidden, in part due the long period of time and computational effort needed by the user's computer to produce a hidden transaction. Since hidden transactions are optional and not default (and rarely used), the hidden transactions stand out on their blockchain, drawing attention to themselves.
And by the way, I think we can successfully make Zcash too traceable for criminals like WannaCry, but still completely private & fungible.
If Zcash can be "too traceable," then it can't be completely private or fungible.
Regular transactions are transparent. Hidden transactions use the zk-SNARKS algorithm which is fairly new, and therefore it hasn't had rigorous academic testing. If the lead developer says that Zcash can be "too traceable," then Zcash can't be untraceable.
Zerocoin would give you this incredible privacy guarantee, then we could add on some features which let the police, for instance, to be able to track money laundering. A back door.
Dr. Green said this about Zerocoin and not about Zcash, and it was said before Zcash existed, but he is currently part of the Zcash team and this comment echos the same sentiment as the Zcash CEO's comment above.
- Transactions are cryptographically secure.
- Since all transactions are not private, the potential exists for an entity to block or blacklist certain coins, making them less valuable than the others. See the note on the lack of Bitcoin fungibility below since the same principle applies to Zcash.
Zcash is a company and currently it takes 20% of all ZEC mined as a founder's reward.
Zcash required a Trusted Setup. This means that you have to trust that the system was set up honestly. If it wasn't set up honestly, unlimited amounts of ZEC could be created without anyone knowing. This would make the hacker rich and devalue ZEC. There is no way to know if the Trusted Setup was executed honestly. We have to take them at their word. This introduces a human point of failure into the system which is counter to almost every other cryptocurrency. You should only have to trust math and verifiable source code in cryptocurrecies, not humans. As we've seen with virtually all large software companies, such as Microsoft, Apple, and even governments, they shouldn't be trusted.
Zcash is not unconditionally sound, can't be with current tech...requires a trusted setup… will need to redo the procedure [Trusted Setup] to upgrade the crypto over time so it's a vulnerability.
Verge (XVG) has a rich list, so it's not private. Put a Verge address in the blockchain explorer (or here) and see for yourself how much money it has, as well as all of its past transactions. If they've sent money, you can see to which addresses they've sent it.
While the IP address of the transaction maker is hidden through TOR and/or I2P, that's only one part of the privacy equation. Almost all coins, including Bitcoin, can be run over TOR or I2P to hide an IP address. In fact, Verge is essentially just Bitcoin over TOR/I2P. A blockchain must be completely private in order to be a private coin, but the Verge blockchain is as public as Bitcoin's blockchain. To Bitcoin's credit, they have never claimed to be private.
- Since all Verge transactions are visible on the blockchain, all Verge transactions can be traced. On their home page, Verge claims to be "completely untraceable." But put a Verge address in a blockchain explorer and you can see its balance and related transactions. It's completely traceable.
- Transactions are cryptographically secure.
- Since no transactions are private, the potential exists for an entity to block or blacklist certain coins, making them less valuable than the others. See the note on the lack of Bitcoin fungibility below since the same principle applies to Verge.
- Verge is decentralized.
For Bitcoin mixers, you have to trust that they can keep their data safe and are not owned by or cooperating with a government, hackers, or other entities.
In July of 2017, the founder of the largest Bitcoin mixing service, BITMIXER.IO, announced that they were closing and gave this as their reason:
… Now I grasped that Bitcoin is transparent non-anonymous system by design. Blockchain is a great open book…
A few weeks later, after considering the various privacy-centric coins, he said this:
After the deep investigation I confirm that MONERO is the best privacy currency. So I strongly recommend MONERO for all people who need extra privacy.
Since all Bitcoin transactions are visible on the blockchain, ALL Bitcoin transactions can be traced. A Bitcoin mixer can highly obfuscate transactions, making it much more difficult for someone to trace the Bitcoins, but not impossible. As technology progresses and companies which specialize in tracing Bitcoin transactions become more prevalent, once highly-obfuscated transactions will become relatively easily traceable:
- Law Enforcement Continues to Invest in Bitcoin Tracking Services
- Time.com: Bitcoins Are Easier to Track Than You Think
- Elliptic: A Company Specializing in Tracing Bitcoin for Law Enforcement
A Google search will reveal dozens of articles like the ones above. And remember, any transaction that occurred at any time in the past is on the blockchain and has the potential to be traced, even if a mixing service was used. In fact, the use of a mixing service is likely to draw attention to those transactions.
- Bitcoin transactions are cryptographically secure, but you have to trust the mixing service.
Not all Bitcoins are equal and have the same value. Some Bitcoins have been blacklisted and blocked by several entities, making those coins less valuable than the rest. If you receive Bitcoins that were used in the past for illegal purposes, then your Bitcoins could be blacklisted even though you had nothing to do with the illegal activity. Or, say a government, employer, or some other entity decides to blacklist your Bitcoins in the future, much like they do with asset freezing or confiscation. There would be nothing you could do. Since a mixer only makes it more difficult to trace your Bitcoins, this category has been marked as "not fungible."
- Andreas Antonopoulos, a former Bitcoin Core developer who is well-respected in the Bitcoin and other cryptocurrency communities, acknowledges the Bitcoin fungibility problem in a YouTube video.
- Here's a service that lists the Bitcoins used in the past for less-than-pure purposes.
- Discussion of the Bitcoin fungibility problem on Bitcointalk.org
- Bitcoin itself is decentralized, but mixing services are centralized. This means you need to trust them.
In our opinion, Monero is the clear choice if you're looking for a private, secure, untraceable, fungible, decentralized cryptocurrency with no trusted setup required. Anything else puts your privacy and security at risk. But don't just take our opinion. Do your own research and see for yourself. Consider that Monero is endorsed and used by entities which depend on privacy and untraceability, such as:
AlphaBay Market (AB) was shut down in July of 2017. The Federal Forfeiture Complaint against AB shows that:
Monero is the only private and untraceable cryptocurrency:
"In total, from CAZES' wallets and computer agents took control of approximately $8,800,000 in Bitcoin, Ethereum, Moreno [sic], and Zcash, broken down as follows: 1,605.0503851 Bitcoin, 8,309.271639 Ethereum, 3,691.98 Zcash, and an unknown amount of Monero." (bottom of p. 20 and top of p. 21, emphasis added)
Bitcoin transactions are not private and can be traced:
"Federal agents obtained the warrants after tracing a number of Bitcoin transactions originating with AlphaBay to digital currency accounts, and ultimately bank accounts and other tangible assets, held by CAZES and his wife." (p. 17, lines 24-26)
- Monero is the only private and untraceable cryptocurrency:
MoneroForCash.com does not advocate or encourage any illegal activity.
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