6 Privacy-Focused Crypto And Blockchain Projects
21 Oct 2022
Blockchain technology mainly gained its fame due to the benefits it provides users: anonymity, transparency, decentralization, and so on.
It all started with the Internet. Then came social media and now the blockchain. New technologies are constantly entering the market, and more so than not, they’re making our lives easier. Want to know your nearest bakery? Google it. Want to reach a friend who’s 50,000 km away? Text them. Want to make a payment as soon as possible? Use blockchains.
This comes in even handier given that our world is becoming increasingly globalized, and solutions are needed to help us break the boundaries of geographical locations. But the price we pay to make our lives easier seems to be privacy.
“Once you’ve lost your privacy, you realize you’ve lost an extremely valuable thing.” - Billy Graham
We’re all very aware that privacy is being taken from us. Over 5 billion people are using the Internet, and 4.7 billion are on social media. By using such technologies, companies can figure out our name, age, location, education, and probably even our 4th cousin’s name. The amount of data that tech giants like Microsoft and Meta (Facebook) have on us is too large to grasp, as many Netflix documentaries and shorts have informed us.
But we still accept privacy as the price to pay to use technology. It seems the issue has been spoken about countless times but hasn’t been fully addressed yet in a meaningful way.
The War Between Blockchain And Privacy
Blockchain technology mainly gained its fame due to the benefits it provides users: anonymity, transparency, decentralization, and so on. These benefits, however, are a double-edged sword – you can access all the details of Bob’s transactions on the blockchain, but Bob can do the same to you.
By design, blockchain technology is not compatible with privacy – if anything, it has the power to eliminate it completely. Everything recorded on blockchains is publicly available, and every transaction can be traced back to its starting point. So if Bob were to be a malicious criminal looking to make some financial gains, blockchain technology could provide him the perfect opportunity.
Those in the Web3 space have recognized such concerns and have gotten to work. There are now several projects championing privacy on blockchains, understanding the greater need to balance between endorsing technology and protecting privacy.
Here are some of the top privacy-focused blockchain and crypto projects:
As mentioned, tech giants like Meta and Microsoft hold an unbelievable amount of data on us – not just who we are and what we like, but also what we buy and how much we spend. Zcash was created to address this snowballing issue, seeking to return power and privacy to its users.
ZCash (ZEC) is a privacy-focused, blockchain payment network that utilizes Zero-Knowledge Proofs (ZPKs) to protect transaction data and shield it from being available even on a public blockchain. It has also added Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK) to its toolkit to allow transactions to be fully encrypted on the blockchain while allowing them to be verified by the network’s consensus.
The project is now one of the leading digital currency protocols, having largely expanded its variety of offerings since its launch. ZCash now offers Halo, Zcash wallet, Heartwood Network Upgrade activation, and more – all focused on providing users with the best privacy and protection.
Monero (XMR) is a cryptocurrency project focused on privacy and censorship-resistant transactions. It is one of the first projects to pioneer real advances in privacy and fungibility, having started its story in 2013.
What made Monero so special was its ability to allow users to send or receive transactions while staying completely anonymous. Unlike Bitcoin and Ethereum which operate via a fully transparent record-keeping play, all information regarding the sender, receiver, and the transaction amount is hidden. This is possible with Monero’s use of privacy-enhancing technologies, so far having adopted ring signatures, stealth addresses, and ring confidential transactions (RingCT) to provide complete anonymity to its users.
The project has since taken off and has even triggered a bounty by the United States government provided to anyone who is able to crack the network’s cryptography. Despite the project’s odd beginnings with scam accusations and countless rebrandings, the Monero coin remains the top-ranking privacy coin by price and market cap.
Aztec Network is a privacy-focused layer 2 platforms secured by the Ethereum network. Its goal is to provide cost-friendly, private crypto payments through the use of ZPKs. The platform’s unique architecture was designed to ensure that the network’s transactions are kept confidential and hidden from the public eye while maintaining compliance and audibility.
Earlier this year, the team also launched Aztec Connect, a DeFi bridge providing a privacy shield for DeFi transactions. Such transactions include staking, lending, swaps, and decentralized autonomous organization (DAO) treasury management, allowing users to privately connect to Ethereum’s most popular applications like Uniswap and Aave.
Also, they have very recently launched their own universal zero-knowledge language, Noir. Noir is a Rust-based domain-specific language to create and verify zero-knowledge proofs. This is revolutionary for digital asset cryptography, as most knowledge around such procedures is usually too technical to understand.
Penumbra is a privacy-focused, cross-chain network in the Cosmos ecosystem. It allows users to securely access DeFi without broadcasting any personal information, account activity, or trading strategies but provides the flexibility of permitting selective disclosure to certain parties of interest. The network supports any DeFi-related activities, including simple transactions, staking, swapping, and market making.
The project first made an appearance in November 2021, when Penumbra Labs raised $4.75 million in seed funding led by Dragonfly Capital. Ever since the project has committed to pushing privacy as the next digital frontier of DeFi. Penumbra is currently building its shielded layer-1 network, integrated with a decentralized exchange. This is done through ZSwap, a new mechanism for shielded swaps.
Their intended roadmap shows the team will also be launching governance services soon, following the testnet launch of their staking services and ZSwap. The team is still working hard to bring their list of promises to the Cosmos ecosystem and has several goals in place for the upcoming months.
The way the internet works today can lead to leaks of sensitive information, sometimes without the user’s knowledge. This poses great threats of surveillance, from stolen funds and identities to profiling and human rights violations. To address such issues, the Nym blockchain focuses on providing privacy infrastructure to protect users against data leakage at the network layer.
Nym is a “layer-0 privacy” oriented blockchain, protecting user metadata through a multi-layered network called a mixnet. Across every layer of the mixnet, mix nodes scramble users’ internet traffic with others, making communications private and hiding metadata. It is workable with any application, allowing developers to build their applications on top of Nym to ensure data protection of their users.
NYM, the project’s native token, is a utility token that can be used for protecting privacy, staking, paying fees, or becoming node runners. NYM/USDT spot trading is also available via the AAX exchange.
Aleo is a permissionless, open-source network for private applications using zero-knowledge cryptography. It is one of the few large-scale zero-knowledge native blockchains that uses a novel consensus protocol that is designed to be faster and more efficient.
Aleo provides a secure foundation and the appropriate tools for decentralized applications to be both private and scalable. At the cornerstone of Aleo’s solution is zkCloud, which includes the snarkOS blockchain and snarkVM, an off-chain private environment. SnarkOS is a decentralized network that hosts nodes using a proof-of-succinct-work consensus protocol. Aleo has also developed its very own programming language, Leo, which simplifies zero-knowledge cryptography to make it intuitive.
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