Privacy Coins

Who sent it?

Hide the link between inputs and the real sender, so observers can’t tell which coins you actually spent.

• Ring signatures: Your transaction is mixed with decoys; verifiers know someone in the group signed, but not who.

Who received it?

Hide the actual destination by generating one-time addresses that only the real receiver can spend from.

• Stealth addresses: Sender creates a unique, disposable address derived from the receiver’s public info.

How much moved?

Keep amounts hidden while still allowing the network to verify that inputs equal outputs.

• Confidential amounts: Cryptographic commitments prove balances add up without revealing numbers.

Does the math check out?

Use cryptographic proofs so nodes can verify correctness without learning private details.

• Zero-knowledge proofs: Prove a statement is true (e.g., “I have enough funds”) without revealing the underlying data.

Monero (XMR)

• Stealth addresses hide the receiver.
• Ring signatures hide the true input among decoys.
• Confidential amounts hide how much was sent.

Zcash (ZEC)

• Supports shielded transactions that use zero-knowledge proofs.
• Also supports transparent transactions for compatibility.
• Viewing keys let owners share read-only access for audits/compliance.

Mixing/CoinJoin (concept)

• Multiple users combine transactions so it’s harder to link inputs to outputs.
• Improves privacy but is not the same as dedicated privacy-coin designs.

Benefits

• Protects salary, savings, and business relationships from public scraping.
• Reduces targeted scams that rely on reading your on-chain history.
• Viewing keys (where available) allow selective transparency for audits or taxes.

Trade-offs

• Some exchanges/regions restrict privacy coins; liquidity may be lower.
• Complex cryptography — always keep software updated.
• Compliance: you may need to disclose transactions to employers, accountants, or regulators when required.

For users

• Understand your local laws and exchange policies.
• Avoid address reuse; prefer wallets that generate new receiving addresses.
• Keep wallets updated; only download from official sites.
• If your coin supports it, generate a viewing key for accountants or auditors.
• Test with a tiny amount before sending larger transfers.

For businesses

• Publish official addresses and invoice procedures.
• Use viewing keys/read-only exports where appropriate for compliance.
• Document internal policies on retention, disclosures, and lawful requests.
• Train staff to recognize phishing and verify addresses out-of-band.