Bitcoin isn't Anonymous, However... (Investment Advice)

in #financial7 years ago (edited)

monero.png vs. zcash.jpg

Image Sources: https://coinmarketcap.com/currencies/monero/
https://coinmarketcap.com/currencies/zcash/

When Satoshi Nakamoto originally envisioned Bitcoin, I believe that privacy one of the most important aspects of blockchain technology. It is evident by the fact that he never reveled himself to anyone. As far as we know he never even withdrew a single coin. I think he might have been worried that people would find out who he was.

Contrary to popular belief, Bitcoin is not anonymous at all really. Each coin has a history that stretched back to it's original minting. You can follow the transaction chain of every coin all the way back, from wallet to wallet. This is, in fact, HOW Bitcoin nodes verify transactions in the first place. They check the history of withdrawals and deposits to ensure that said wallet does in fact contain the coin that it is trying to send.

As everyone knows Bitcoin has a few fatal flaws. Speed is probably the most important one, because it really limits Bitcoins ability to grow. Everyone wants to use it, but what good is it if you have to sit in the parking lot at a gas station for 45 minutes waiting for your transaction to confirm so you can pump your gas and get to work? What if 45 minutes was on a good day?

There are two coins that I think are hugely interesting right now. One is Monero, represented by XMR on the exchanges. Monero is built the "Cryptonote" protocol and is much different from Bitcoin. It experienced RAPID growth when it was adopted by the Darknet's Alphabay market place which is now shut down. This was in 2016. Since then, it's development has far from stagnated. In fact, it is doing very well on Poloniex as of the time this article is being written. Due to Monero's focus on privacy and scalability and due to it's long standing place in the Alt-Coin marketplace, as well as it's current value and recent growth... I highly recommend XMR to cryptocurrency investors.

Sources: https://en.wikipedia.org/wiki/Monero_(cryptocurrency)
https://poloniex.com/exchange#btc_xmr

The other coin I'm here to promote is Zcash or ZEC on the exchanges. ZEC is based on much the same software as Bitcoin, even down to the fact that there will only ever be 21,000,000 of them. ZEC is great because it allows for two different types of addresses. The first is called a "T" address or transparent address. It is used for all public transactions and anyone can see it, just like Bitcoin transactions. The other type of address is called a "Z" address and it is completely anonymous. No one but you can see the sender, the recipient or the amount of the transaction. ZEC is doing very well on Poloniex as of the date of this article's posting, however, it is in the middle of it's down cycle which is a great time to buy.

Sources: https://en.wikipedia.org/wiki/Zcash
https://poloniex.com/exchange#btc_zec

Now, many will argue that pure anonymity will do nothing but fuel illegal activity. In the case of Monero being used on the Darkweb, that argument will be heralded by those who disagree with currencies that are unable to be audited. However, I believe a very small percentage of people use Monero for illegal uses, just like a small percentage of Bitcoin users do. The main reason I believe this is because of Monero's low adoption rate. Bitcoin still isn't very widely adopted. It's safe to say that very few alt coins are.

Zcash, however, took note of this problem from the get go. That is WHY there are two types of addresses. The thing is, Zcash isn't truly anonymous, but it does allow the control of the information to stay in the hands of the person or persons who are actually transacting using the coin. This makes the coin very audit able while allowing it to remain anonymous. Therefore, Zcash would appear at this point, to be the better investment.

Just keep in mind that Monero is much more scalable than Zcash, that is to say, more transactions can be done per second which by most all accounts makes Monero much more useful. You'll have to decide how important that is to you, and more pertinent is how important that is to the community.

If you want My2BTCents, I'd get a little bit of both. They will both enjoy several very nice pops before the EOY 2017.

Thanks for reading. If you found this post helpful, or if you think you might make a little money off of it... Feel free to send me a cup of coffee's worth of satoshi to the following Bitcoin address and I will happily keep writing these financial posts : )

17UWQzw7Rz2U1JxTeinYVxsQUJzAwHvtSC

Sort:  

There seems to be quite a few other anonymous coins on the market now, but Monero seems to be the "bitcoin" of anonymous coins IMO.

I personally hesitated to invest in Monero at the beginning because of the wannacry issue aka hackers used computers to mine Monero with your cpu.

I was always concern of a huge dump of the coin by the hackers, but in reality I'm thinking I'm wrong about this now and the price has only doubled since I wanted to get in.

lol I guess you live and learn.

Live and learn. Wow, I could say that about SO MANY missed opportunities in the Cryptocurrency explosion. Of course, I've also made some really good calls. Still, a lot of people liken it to gambling. I say, as long as you did your research and gave it your best, you did the right thing. When you stop making active decisions about where you are investing your money, you better start holding on to your hat, and your house. You are about to lose it all : ). Thanks for the thoughtful reply. : )