We hear it asked all the time: which privacy coin is the best? Users are continually trying to find the most anonymous cryptocurrency that allows true financial freedom. Most have heard of Monero, the private digital currency. It isn’t the only option for users seeking anonymity, however, and now, a new privacy coin on the block called Pirate Chain is gaining exposure.
Let’s take a deep dive into both projects to see who comes up with the best privacy coin honors.
Private by Default: Pirate Chain
Pirate Chain is a cryptocurrency platform on a mission to preserve people’s financial freedom in a system dominated by transparent transactions. Pirate Chain utilizes zk-SNARKs as its essential anonymizing function.
Where did Pirate Chain come from? It’s an asset chain of the Komodo network and although Pirate Chain is now independent of Komodo, it’s capable of running Komodo’s features.
To take things back even further, Komodo is a fork of Zcash, and Zcash itself is a fork of Bitcoin. As is widely known, Bitcoin’s transactions are fully transparent through its distributed ledger. Zcash developers wanted to create a totally anonymous currency and thus created the zk-SNARKs protocol. So about those zk-SNARKs...
Zk-SNARKs and The Fungibility Issue
Zk-SNARKs is groundbreaking technology for privacy oriented cryptocurrencies. The technology behind it is based on zero-knowledge cryptography from the 1980s. Zcash developers have since taken it a step further and designed zk-SNARKs to allow for anonymous transactions while maintaining network consensus to validate transactions.
The idea behind anonymous transactions while simultaneously validating transactions has been a hot topic amongst leading developers. Monero’s core developer Riccardo “flufflypony” Spagni said, “Zcash’s zkSNARKs provide much stronger untraceability characteristics than Monero.”
It’s through zk-SNARKs that shielded transactions are a possibility. Shielded transactions are the function that allows senders and receivers to remain anonymous. Pirate Chain has taken zk-SNARKs further by only allowing shielded transactions within their platform.
By only allowing shielded transactions, Pirate Chain effectively blocks blockchain analytics firms from following digital trails left by public transaction data. Even though Zcash pioneered zk-SNARKs, they have fallen short by allowing non-shielded transactions to send to shielded addresses, and vice versa.
Monero’s Censorship Resistant Vision
Launched in April 2014, Monero is a fork of Bytecoin. Monero’s vision is to allow its users a simple and effective currency to transact anonymously.
Monero has been the go-to cryptocurrency for dark web users ever since the realization became clear that Bitcoin transactions were fully public. Before the infamous Silk Road was shut down, most users were transacting with Monero to hide their steps from authorities.
It wasn’t long until government and financial institutions recognized the threat that Monero posed, and has since been curbing Monero’s efforts by funding firms that specialize in tracking seemingly anonymous payments.
Monero’s Anonymizing Technology
Monero relies on obfuscation of a user’s public address rather than total encryption found in Pirate Chain. Monero’s Ring Signature scheme only mixes a users transaction within a pool of other public addresses to cloak its route to a destination address.
Monero also uses stealth addresses. The sender is required to create a one-time send address that is only known between the sender and receiver. This method further helps Monero’s privacy-oriented agenda but falls short as just a disassociation scheme.
Ring Signatures technology had high hopes in the past, but with the advent of blockchain analytics firms, this scheme has become more of a band-aid rather than a cure. Blockchain analytic firms are increasingly being contracted and funded by financial and government institutions to track untraceable digital money.
Although Monero’s Ring Signature scheme mixes a users transaction with many others, they are still in a sense semi-transparent, which over time, analytics firms can follow each trail and come to an eventual conclusion on who the user is.
Monero’s anonymizing tech comes under further scrutiny when sending to public exchanges. Since Monero’s stealth addresses are only semi-private, and each transaction is just mixed with others, its eventual destination on an open exchange can be traced. If a user decides to “cash out” on a regulated exchange such as Coinbase, personal details such as ID and banking information will need to be provided.
Pirate Chain: The Next Generation Privacy Platform
When it comes to keeping funds safe from prying eyes of blockchain analytics firms, Pirate Chain is the clear winner.
When compared side by side, Pirate’s zk-SNARKs out-encrypts Monero’s Ring CT Signatures by a longshot. As we’ve seen, Monero simply disassociates their user’s transactions, whereas Pirate Chain actually encrypts it.
Zk-SNARKs’s security layer is based on the trusted setup of parameters created by developers at Zcash during two ceremonies. These ceremonies created public parameters that are specific to each generated address. When a user on the Pirate Chain network submits a transaction, their encrypted information isn’t verified by a public digital signature like Monero. Instead, the transaction is proved by the public parameter which remains encrypted to the outside world.
Since Pirate Chain only allows private to private transactions, this keeps their ecosystem untainted by public addresses. As seen with Monero, all of their addresses are at some point public. The larger Pirate Chain grows, the larger the pool of anonymity.
Another benefit to using Pirate Chain is their compatibility with the TOR network. This is another option to further your anonymity to by obfuscating your IP address to steer clear of blockchain analysis.
Recently, Zcash unveiled its highly anticipated Sapling upgrade. Pirate Chain has fully integrated this update to increase the network’s overall efficiency. The upgrade lowered the total memory requirements by nearly 97% and increased the generation of private addresses by almost the same value. This recent event has also made Pirate Chain one of the fastest anonymous cryptocurrencies to use.
Currently, even after the Bulletproof upgrades from Monero, transaction times are still roughly 20 minutes. Pirate Chain, on the other hand, has 60 second block times.
When taking all aspects of privacy into consideration, we need to look at the technology surrounding a given project. Although Monero wins the popularity contest, it’s privacy features don’t stand up the Pirate Chain and its zk-SNARKs protocol. If true financial freedom is your goal, then look no further than Pirate Chain.
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