015: Privacy Coins
The true “digital cash” of the internet. We talk about incentives to use privacy coins, and why they freak some people out.
Episode 015 Transcription
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Episode 15 Transcription – Privacy Coins
Liam
Welcome to candid crypto, a place where anyone can learn about blockchain tech. We are two friends who love cryptocurrency and have acted as retail, investors, and researchers for years.
Michael
I’m Michael
Liam
and I’m Liam. Our goal is to create a community where listeners can build their knowledge and meet like-minded people in the digital assets space.
In the early days of Bitcoin, it was often regarded through a criminal lens, the media and others referred to it as being a tool for drug dealers and terrorists to fund their coffers full of illegal digital Cash. Cryptocurrency was treated as though it had an aspect of privacy to it.
Michael
How is a public blockchain private?
Liam
Yeah, good question. It isn’t by and large, the illegal activity that was performed on Bitcoin in its early days was running on borrowed time. Governments and individuals created tools to analyze the Bitcoin blockchain known as chain analysis, and this eventually extended over to other public blockchain systems as well.
Michael
So Bitcoin really isn’t digital Cash and there must be a better way to send cryptocurrency without being traceable. That is why today we’re talking about privacy coins. So what exactly is a privacy coin?
Liam
Privacy coins are a class of cryptocurrencies that power private and anonymous blockchain transactions by obscuring their origin and destination.
So, Michael, what are the options when it comes to privacy coins?
Michael
So I feel like most people are familiar with these three: Monero, Dash, and Z Cash. Personally, I first heard about Monero as the first privacy token and during 2017, 2018, it was in the news because Venezuela and Venezuelans were using Bitcoin and Monero as an alternative currency to the Venezuelan dollar, which was going all over the place because it’s a very unstable government and cryptocurrency is a great outlet for people in need.
Liam
Yeah.
Michael
A better financial instrument.
Liam
Yes. The key difference between Monero, Dash, and Z Cash is that Z Cash and Dash have optional privacy. You don’t necessarily have to use the privacy features. Whereas Monero has privacy by default, you must use the privacy feature.
Michael
Yeah. And that’s really interesting.
And, you know, they all have very small differences.
Liam
Yeah. Yeah. I would have assumed all of them were privacy by default, but it turns out two of them aren’t
Michael
and I really think they implemented that as an option due to the fact that it makes it a little bit more general and acceptable by different crypto exchanges and countries, because.
You know, a privacy token, a truly private cryptocurrency can be scary to governments and people in power because it can potentially be used for illegal activity. Like Bitcoin was demonized at first so I can see why. Yeah. Tax evasion really concerning issue when it comes to cryptocurrency
so, and even more controversial when talking about privacy tokens overall, I don’t think privacy tokens were created for bad purposes. I think it was created for people like Venezuelan people who are just trying to find a better alternative that isn’t scrutinized by their leadership and governments
Liam
it’s like Tor or other anonymizing services.
Yeah. You don’t have to worry about censorship of funds with a privacy token because say a whistleblower could accept a privacy token and use that to continue to whistleblower survivors, whatever they need money for. There are definitely reasons why privacy tokens should exist. And I am glad there is something we can use as a society.
Michael
And it’s funny, you use whistleblowing as an example because one of the few people. I’ve heard promote privacy tokens a lot is Edward Snowden. I’ve also heard Elon Musk talk about it and most importing. Yeah. He just wants to portfolio pump everything. And then people that I really respect in the crypto space is Vitalik Buterin.
He’s a huge advocate for Z Cash and sees value in the tech there. So I think that’s really cool.
Liam
So if you’re listening, buy some privacy coins, send them to your friends be like, yo, check out my cool privacy coins. No one knows we sent these to each other except for you. And that is pretty awesome.
You can have a, you can have a very nuanced friendship when you, uh, when you have shared privacy tokens with each other yeah, we should do that more because we both own Z Cash. Gosh, give me Cash. And obviously, this isn’t financial advice, but it is an, it is an interesting subgroup in crypto. And you know, if you’re a hardcore crypto enthusiast, it makes sense to be, to have an own, truly private.
Thank you so much for tuning into this week’s episode of candid crypto, as always check out our website, candid crypto podcast.com. You can find platforms to listen to us on, and also our social media, including our Twitter, Instagram, YouTube discord, and Reddit’s take care and we’ll see you next week.
