Anonymity of TOP 5 cryptocurrencies. Comparison

Apart of Bitcoin, several thousands of cryptos were created… If the price keeps increasing for many months, it indicates cryptocurrency perspectives.

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Anonymity of TOP 5 cryptocurrencies. Comparison


Comparison of TOP cryptos by anonymity of its use

Comparing top 5 cryptos by anonymity, it is important to start with Bitcoin to further understand whether other cryptos differ from it.

1. Bitcoin was first suggested to become the first currency that would liberate the users from bank and governmental control. Due to control unconditionally means de-anonymization, Bitcoin was intended as anonymous payment service. While creating a local Bitcoin wallet, a user is required neither to verify his/her identity through Internet (any document scans are not needed) nor fill in an application form with one’s passport data.

One may think that Bitcoin user anonymity is provided under the mentioned conditions. In fact, anonymity cannot be reached in a full scope because Bitcoin system creators intended transaction data to be public. In other words, transaction volume, sender and receiver wallets addresses can be seen by anyone, who knows a transaction hash, or wallet address of the transaction parties. A path of any amount of money can be monitored with the help of a number of particular program instruments, making sense about the transactions history and transferred funds.

In many countries, there are already the police authorities that ensure the identity identification of those people, who used Bitcoin illegally, for a drug trade, for example.

Bitcoin is also said to be not anonymous but pseudo-anonymous cryptocurrency. People, who trade quite frequently can easily determine a wallet from which the traded Bitcoins were sent; it is quite difficult to double back because Bitcoins are transferred through a range of intermediate wallets. The next step would be to attach a particular username with a basic wallet address (wallet address means a pseudonym in crypto-world). Though it is a tough task, the authorities did manage to do so.

2. Bitcoin Cash developers have chosen another way of network scaling and output capacity problem mitigation, different from a classic Bitcoin scaling; they have increased a volume of bitcoin-blocks in their network up to 8 megabytes and changed complexity measurement instruments. Apart of mining mechanism modifications, BCH code was not changed much; that is why the anonymity of this coin does not differ seriously from anonymity of BTC.


3. Litecoin is a kind of Bitcoin, which is different from Bitcoin by quantity rather than quality. LTC is mined by a Scrypt algorithm; LTC block finding speed is four times greater than Bitcoin one, making LTC transactions even faster. In terms of anonymity, LTC and BTC are equal.

4. Ethereum differs quite significantly from Bitcoin by its performance and primary purpose (ETH is a kind of “fuel” for smart contracts, which is described here). Though contracts are public, contract parties are still rest anonymous for everyone, even for network moderators.

As a payment service provider, Ethereum cannot still ensure a complete anonymity due to Ethereum transactions can be thoroughly monitored, which is a case for Bitcoin-network. All in all, a ETH-wallet possession is still rest anonymous. By the way, Zooko Wilcox, who is a creator of highly anonymous ZCash cryptocurrency is currently dealing with Ethereum team; the cooperation is aimed to enhance system security with the help of specific instruments aimed for cryptographic transaction security. Due to these instruments, ETH network transactions would be managed completely untraceable.

5. In fact, Ripple is quite a unique cryptocurrency. Ripple characteristics have been described in a previous article. In the XRP network, there is no blockchain and mining. Value is delivered via a payment gateway system. Value delivery suggests that a value is delivered first (USD, RUB, gold, oil, air miles, and so on) through specific gateway where it is exchanged for XRP; when the barter is found by Ripple system, XRP is sent to a contractor and exchanged for a required asset. All the users can see the transactions in Ripple system. As no transaction is attached to a particular user and there is no possibility to monitor these transactions from outside, XRP payments are rest totally confidential.

This is the second article from a ‘TOP 5 cryptos and their peculiarities’ series. You can learn about new articles from this series and important updating through the official channels: TelegramFacebook, Twitter. To be continued.

Additional materials that may help you:

Capitalization of TOP 5 cryptocurrencies. Comparison

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Monero and Zcash - new level of the anonymity

TOP-5 facts about Ethereum

What are the pros and cons of investing into cryptocurrency

Why do miners choose exchanges to exchange cryptocurrency for fiat funds

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Your respectfully, EXMO team