Most crypto investors do not feel like sharing their personal data with crypto exchange platforms of any sort. Differences in the degree of security of stand-alone blockchains also contribute to the desire to stay anonymous.
Let’s compare Bitcoin to Monero and see which crypto grants investors a high degree of privacy. Then, it’ll be up to you to decide if you want to immediately buy BTC to XMR or purchase even more BTC.
Why Is Crypto Anonymity So Important?
From day one of the existence of the crypto market, the anonymity of transactions has been regarded as a sensitive aspect. Although users are promised the highest level of privacy and safety in their financial operations, the truth is somewhat different. Let’s review the actual reasons why investors care for their anonymity so much:
- Security and safety. The frauds in the crypto market are absolutely not unheard of. Not sharing any financial information is quite a way to minimize security risks.
- The need to cover large transactions. It’s especially true for companies that need to change their investment portfolio somewhat. The market would react to the purchase or sell anyway, but news about large transactions causes a “snowball” effect, resulting in many investors going for irrational trades.
- Personal preferences. Probably it’s the weakest point, but still, no one particularly likes when their actions are easily traceable. Some people are especially concerned about it for personal reasons.
In essence, choosing the option granting you a higher degree of privacy is always the right call.
Technicalities of Bitcoin
This world-famous crypto appeared back in 2009 and achieved success over the years. As of July 2022, it is worth slightly less than 20,000 but is expected to surge anytime.
The white paper of this coin claimed that privacy in transactions is preserved by anonymous public key use and featuring new key pairs for every transaction. It is quite a shift compared to the traditional banking system, which just limits access to financial data. Yet, the system hardly can be named ideal.
Although the “names” of parties who make exchanges are not disclosed at any means, the time and size of transactions are still publicly accessible. Multi-input transactions show even more linkage. At the end of the day, if the owner of a single input was found, their other transactions made would be easily revealed as well.
There is another level of protection in the Bitcoin protocol — ZeroLink. It’s the method for “mixing” coins that took part in transactions to make it hard to reveal an owner or a particular coin. With ZeroLink, users can mix coins without the involvement of a third party.
Technicalities of Monero
Monero (XMR) is privacy-oriented crypto released back in 2014. It is safe to say that XMR is a fairly popular coin on the market. Its price, as of July 2022, is slightly more than $120.
Monero was designed after bitcoin, so it shares most features with its ancestor. Yet, in the matter of privacy, Monero offers a different protocol called Ring Confidential Transactions (RingCT).
RingCT is a combination of ring signatures — the standalone concept — and confidential transactions. The way it proves the ownership of assets differs from cryptographic signatures of the first cryptocurrency. “Decoys” — random money — are mixed into every transaction. So, it’s impossible to know what amount of Monero was signed off on and spent.
Confidential transactions just enable financial operations to stay hidden under Pedersen Commitments (a cryptographic algorithm).
Which Crypto Provides a Higher Degree of Anonymity?
It’s hard to claim that Bitcoin does not grant investors an adequate degree of anonymity. ZeroLink is a well-functioning protocol that just does its job. Yet, RingCT is regarded as an advanced privacy protocol. Revealing a party who participates in a transaction is way more difficult with Monero. So, XMR is a winner in this comparison.
If you also want not to share your sensitive personal data with a crypto platform while making a transaction, consider using an anonymous cryptocurrency exchange provider.
