Introduction

Today I will be talking about how privacy is being addressed by various blockchain solutions. I provided a brief introduction on why privacy is needed on blockchain and some solutions trying to address it in my previous post, https://www.securityprivacyrisk.com/what-are-privacy-coins/

Anonymity, Privacy, & Fungibility

When Bitcoin was introduced, it was said that transactions were anonymous. It was later discovered that the transactions were indeed pseudonymous, such that public addresses were alphanumeric numbers and did not have a persons name assigned to it, the moment a person is linked to a public address, the transaction is no longer anonymous.

Some people are okay sharing their personal information on social media, while others not so much. Obviously, the number of people who a concerned about their privacy is a very small number compared to extroverts.

Other use cases where privacy and anonymity are paramount is the use of blockchain for storing personal information such as health records, identity, and personal information such as date of birth, social security numbers, and other personal information.

To address this requirement for privacy, anonymity, and fungibility, various off-chain and on-chain solutions are being proposed.

Possible solutions

Some solutions that are available to address privacy, anonymity, and fungibility are accomplished via mixing:

  • Centralized: There are online services such as http://bitmixer.io, where, you send your bitcoin to a site, they charge you a fee for this service, and they return your bitcoin to your specified address. The issue with these sites is the trust, what if the site runs away with your bitcoin
  • De-centralized: There are privacy tokens that are implemented mixing using the protocol such as:
    • Ring Signatures: Another method to anonymize your transactions. It uses cryptography were encryption keys are added to the ring and when a transaction is signed a session key is generated from the key in the ring. Nobody knows which key was used. The more signatures in a ring the better anonymity of the transaction. The previous version of ring signatures only supported anonymizing sender and receiver, not the amount. RingCT was recently introduced that also anonymize the transaction amount.
    • CoinJoin: A method where several people agree to add their transactions in a pool and payouts are done from the pool disconnecting sender and receiver.
    • Zero-Knowledge Proofs are implementations where for one party (the prover) to prove to another (the verifier) that a statement is true, without sharing the exact information and asserting that the statement is true. Some of the implementations are:
      • zkSNARKS – Zero-Knowledge Succinct Non-Interactive Argument of Knowledge
      • zkSTARKS – Zero-Knowledge Succinct Transparent Argument of Knowledge

The blockchain is not a solution for every use case. There has to be a genuine need to use blockchain. This particular problem of privacy & anonymity is only an issue in public blockchains, private blockchains are permissioned and implement various controls to address the privacy & anonymity requirements.

Some Privacy Tokens

To address these very issues, privacy coins or privacy tokens have come into existence.

All these tokens are different implementations of the same requirement, making crypto token transactions untraceable for both the receiver and the sender.

Following is a list of tokens that I could find so far, there are many more.

Name

Symbol

TPS

Forked From

Former Name

Total Supply

Founded

Consensus Algorithm

Privacy Algorithm

Protocol

Transport

Send Options

ByteCoin

BCN

N/A

184.46billion

1-Jul-2012

CryptoNight-PoW

Ring Signatures

CryptoNote

Monero

XMR

1000

ByteCoin

Unlimited

18-Apr-2014

CryptoNight-PoW

RingCT

CryptoNote

CloakCoin

CLOAK

4.5million

3Jun2014

X13

CloakShield & ENIGMA Transactions

Aeon Coin

AEON

Monero

18.4million

6-Jun-2014

CryptoNightLite-PoW

Ring Signatures

Verge

XVG

100

Dogecoin

DogeCoinDark

16.5billion

1-Oct-2014

Scrypt, x17, groestl, blake2s & lyra2rev2

Wriath

DASH

DASH

56

Litecoin

Darkcoin, XCoin

18million

18-Jan-2015

Coin Join

Instant, Private

PIVX

PIVX

50

DASH

Unlimited

1-Feb-2016

POS v3

zPIV

Public

SwiftX

Zcoin

XZC

N/A

21million

28-Sep-2016

PoW

zk-SNARKs

Zerocoin

Zcash

ZEC

Bitcoin

21million

28-Oct-2016

Equihash-POW

zk-SNARKs

Zerocash

Transparent Address, Shielded Address

Zclassic

ZCL

Zcash

21million

5-Nov-2016

Equihash-POW

zk-SNARKs

Zerocash

Zoin

ZOI

Zcoin

21million

5-Nov-2016

Lyra2Zoin-PoW

zk-SNARKs

Zerocoin

Sumokoin

SUMO

Monero

88million

1-May-2017

CryptoNight-PoW

Ring Signatures

RingCT

ZenCash

ZEN

Zclassic

21million

23-May-2017

Equihash-POW

zk-SNARKs

Zerocash

Deep Onion

ONION

62.5

N/A

19.4million

1-Jul-2017

POS+POW

zk-SNARKs, Coin Join, Ring Signatures

DeepSend

Spectrecoin

XSPEC

19-Aug-2017

POS v3

Tor+Ring Signature

OBFS4

Tor

Bitcoin Private

BTCP

Bitcoin & Zclassic

2-Mar-2018

Equihash-POW

zk-SNARKs

ShadowCash

SDC

https://www.youtube.com/channel/UCQtYBTppBxS0WLeCBx33gNQ