Countries are imposing new flanged cryptocurrency regulations on virtual coins every single day. In addition, government authorities have addressed the utilization of cryptocurrencies for criminalized activities. For example, in The Silk Road case, We all know, bitcoin acquired the spotlight when it was being heavily used for purchasing drugs on the dark web.
But now, cryptocurrencies are evolving as an actual monetary system.
The real intention of cryptocurrency regulators is to transform cryptocurrencies into a complete transparent payment ecosystem. To know more about how cryptocurrency trading works, visit british bitcoin profit site. The transparency of this payment ecosystem will ease using these virtual coins for payments.
Undeniably, such rules are good for stakeholders, merchants, and buyers using this payment method, but it sets many disadvantages for privacy-focused digital currencies. So let’s find out what the government is planning for the privacy-focused cryptocurrencies.
Understanding Privacy-Focused Cryptocurrencies!
Before acknowledging the government’s plan on these currencies, we must know the purpose and requirements of these digital coins. For example, the largest cryptocurrency, bitcoin, seems anonymous. But is pseudonymous and is made for the public.
Blockchain address or wallet address tries to protect the personal detail of parties performing the transactions. However, tracking details like amount transactions, wallet address, and time and geolocation are still possible.
If one uses the same wallet address and repeats it with every transaction, it is not difficult to trace that individual’s details. Moreover, hackers can easily hack one trustable exchange with lose security and steal the entire cryptocurrency holding due to such facts. Therefore, the extent of security offered by a public currency is not more than as of a private currency.
Privacy-focused digital currencies majorly focus on increasing security and offer much better security than public cryptocurrency. One of the most famous examples of privacy-focused cryptocurrency is Monero.
Monero is currently very bullish, and the price is inclining at a very rapid speed. Monero was trading at a market value of $235. Private currencies are known as private only because they do not have a public ledger. Instead of a public ledger, privacy-focused cryptocurrency comprises a private ledger.
Due to the existence of a private ledger, it is tough to acknowledge the starting and endpoint of a transaction. One cannot even monitor the amount of Monero being transferred. Therefore, Monero is the best choice for illicit activities like Money laundering and funding criminalized activities as no one can keep a record of transactions. Monero and Dash are also acquiring popularity as privacy-focused digital coins.
Dash follows a similar concept as of cryptocurrencies like lite coin and bitcoin. However, the blockchain of this currency is also private. The privacy-focused cryptocurrency, dash and Monero process on the proof of work, not on proof of stakes Bitcoin, ethereum and lite coin also use proof of work that means even you can create any of these tokens by mining.
Use Case!
At the very foremost instance, the use case of privacy-focused cryptocurrencies might only seem for performing illegal activities like money laundering and corruption. However, the instance an individual monitors today’s rules and guidelines for transactions, the usage of this privacy-focused cryptocurrency increase intensely.
Dash is one of those cryptocurrencies that are dual. In short, you can both enable and disable the privacy feature of this cryptocurrency. Private Cryptocurrencies have a great use case when it comes to government transactions. Private Cryptocurrencies works similar to a public currency, but one cannot detect the amount and parties involved in the transactions. Therefore, the feature can help the government keep their transactions and deals confidential, secure and encrypted.
Government Regulations!
The government merely concentrates on making the virtual coin’s ecosystem as transparent as possible. However, it might reduce the market valuation of a cryptocurrency. So India is also all set to ban these private digital currencies.
According to higher sources, private cryptocurrencies encourages criminalized activities. The future of public digital currencies is entirely predictable, but the future of privacy-focused digital currency is still uncertain. However, private cryptocurrencies might still become an essential part of the cryptocurrency marketplace.
The above-listed portion is everything one should know about privacy-focused cryptocurrencies.