When you make transactions using blockchain technology, your financial dealings are not absolutely private. It is important to protect your privacy when using cryptocurrencies, just like any other financial transaction. Fortunately, there are several tools available to help you do so. Part 1: Privacy Tools in Cryptocurrency discussed some tools, such as coin mixers or tumblers, zero-knowledge proofs, and privacy wallets. In this article, we will explore other tools that can help you maintain your privacy, as well as some potential risks to be aware of. We will also explain how using privacy coins can be even more effective in keeping your identity anonymous.
Secure web browsers
Many browsers collect your data and sell your information to advertising partners who bombard you with targeted ads. They get your personal data from your browsing history, login credentials, autofill information, and cookies and trackers. Imagine this happening while you are dealing with crypto and other financial transactions on your browser. Security professionals consider Brave as the standard to beat. It blocks trackers, ads, cross-site cookies, and fingerprinting automatically. Brave connects through the most secure protocol HTTPS (Hypertext Transfer Protocol Secure), and bypasses AMPs (Accelerated Mobile Pages). It has no performance issues and is easy to sync across devices. Firefox and the Tor Browser are the next ones that experts trust.
VPNs (Virtual Private Networks) encrypt your internet traffic and disguise your online identity. They make it difficult for third parties to know your online activities and steal data or financial assets. Comprehensive VPN solutions will encrypt your IP address and impede leaving traces of your internet activity, search history, and cookies. A good VPN also has a kill switch that ends pre-selected programs to avoid compromising your data. It also has multiple authentication systems, making it difficult for third parties to access your connection.
Stealth addresses hide your crypto’s public key, the identities of the sender and receiver, and the amount. They generate a unique, onetime address for each transaction, which is then used to receive funds. This address is not linked to the user's actual address, making it difficult for third parties to track and monitor the user's transactions. This helps to protect the user's privacy and security, as well as prevent any potential targeted attacks or surveillance. Zcash, Monero, and Verge use stealth addresses.
A digital signature is a form of cryptography that verifies the authenticity of data. It ensures the integrity of digital information. Ring signatures involve a group of users with their own keys. The group will appear to have merged to form a ring and complete a transaction as a group to create a digital signature. Multiple users sign the transaction instead of one person, just like you would need signatures from several people to open a joint account in a bank.
Risks linked to the use of crypto privacy tools
Using privacy tools in crypto may seem like a good idea for maintaining anonymity and keeping transactions secure, but it comes with certain risks. The use of mixers or tumblers could make you more vulnerable to scams, hacks, and thefts because cybercriminals can exploit the tools. Additionally, regulators may view the use of such tools with suspicion, and may subject you to legal scrutiny. Moreover, the anonymity provided by these tools can also facilitate illicit activities, making you vulnerable to being implicated in money laundering or other criminal activities. Weigh the benefits and risks of using privacy tools and proceed cautiously.
The use of these tools does not automatically mean something illegal is going on. Preserving privacy is crucial in the digital age we live at. Authorities must balance preventing illicit activities without suppressing innovation.
Use privacy coins instead of privacy tools
Privacy coins, like Monero and Zcash, offer a more comprehensive and user-friendly approach to ensuring privacy in cryptocurrency transactions compared to other crypto privacy tools. Some privacy tools, such as mixers and tumblers, may require technical expertise and can be complicated to use. Privacy coins offer an easy-to-use solution that allows users to maintain their privacy without needing to understand the technical aspects of the technology. Privacy coins also provide a higher degree of anonymity as they use advanced cryptographic techniques to hide transaction details from public ledgers, ensuring that transactions cannot be traced back to individual users. As such, privacy coins are a more user-friendly and effective option for individuals who value privacy and security in their cryptocurrency transactions.
The number one privacy-enhancing crypto Monero has stealth addresses and ring signatures built in, not just an option like other privacy coins. It also has unique cryptographic technologies, like RingCT, Bulletproofs, and Dandelion++. They all work together to ensure anonymity in every aspect of each transaction. Using Monero together with a secure Monero (XMR) wallet will make confidentiality a certainty.