Privacy Coins

Abstract

In this chapter, you will learn about the privacy limitations of public blockchains such as Bitcoin and Ethereum, and how these limitations have led to the development of privacy-focused cryptocurrencies. You will study the motivations for privacy coins and the risks posed by government-issued digital currencies. The chapter introduces and compares three major privacy coins: Zcash, Dash, and Monero. For each, you will explore their underlying technologies, including zero-knowledge proofs (zk-SNARKs), CoinJoin-style mixing, and ring signatures with RingCT and stealth addresses. You will also learn about consensus protocols, supply models, and the trade-offs each project makes between privacy, usability, and scalability. Finally, you will analyze the comparative strengths and weaknesses of these systems and understand the broader implications of privacy on blockchains.