The overwhelming majority of crypto transactions do not include privacy tokens, with most traders choosing to move funds transparently rather than privately.
According to crypto analytics firm Coin Metricsโ Sept. 1 State of the Network report, the combined daily transactions of three privacy coins, Zcash (ZEC), Monero (XMR), and Grin (GRIN), equated to only 6% that of Bitcoin (BTC), despite the coins offering substantially more privacy.
โUser apathy towards privacy is probably the biggest shortcoming of the current anonymous transactions systems,โ the report stated.
โDespite great technological advancements in crypto-currency privacy, uptake of privacy features and assets has been slow.โ
In addition, crypto traders may not be taking advantage privacy features their tokens have. ZECโs includes trustless zero-knowledge proof systems, also known as zk-SNARKs, which allow for transactions that do not reveal โanything about who transacts or what amounts are exchanged.โ But the report stated that fewer than 2% of ZEC transactions were โfully-privateโ and shielded.
Coin Metrics speculated that as mainstream adoption advanced, cryptocurrencies needed to return to their โoriginal privacy-oriented ethosโ to survive. If not, the reported stated, the idea of anonymous transactions systems could simply fade away.
However itโs not always that easy to use privacy coins. Australian exchanges have begun to delist privacy coins like Monero citing government regulations.
The increasing privacy of BTC through services like CoinJoin may hold the key to cryptoโs private salvation. CoinJoin, with providers including the privacy-focused Wasabi Wallet and Samourai Walletโs non-custodial Bitcoin mixer, Whirlpool, has seen increased activity. Whirlpoolstatsโ Matt Odell reported that users set a new record in August for the number of Bitcoin mixed monthly at 2,429 BTC, or almost $30 million.
Monero and Grin each have unique privacy features. GRIN is an implementation of the Mimblewimble protocol, which employs confidential transactions to obfuscate transaction amounts and makes use of aggregated transactions to prevent the linking of native transaction inputs and outputs.
XMR uses ring signatures that aggregate a crypto senderโs true coins with a set of decoys, picked semi-randomly from other points in the blockchain. On Aug. 6, the token experienced its largest increase in daily hashrate, spiking to 2.2 GH/s.
