The two most widely-used privacy-based cryptocurrencies today are Monero (XMR) and Dash (DASH). Away from these two, Zcash (ZEC), Verge (XVG), and Grin are lagging behind in terms of adoption, market cap, and price at the time of writing, but they could one day be much more widely adopted as privacy coins grow in popularity.
This is because Zcash has strong technology, Verge has a huge community of users and supporters, and Grin is one of the best privacy and fungibility technologies ever implemented in the cryptocurrency space.
Let’s take a quick look at each individually.
Zcash
Zcash is a privacy-protecting digital currency built on strong science. It helps users transact efficiently and safely with low fees while ensuring digital transactions remain private.
Zcash addresses are either private (z-addresses) or transparent (t-addresses). A z-to-z transaction appears on the public blockchain, so it is known that the fees were paid and the transaction occurred. But the addresses, transaction amount, and memo field are all encrypted and not publicly visible.
Using encryption on a blockchain is only possible through the use of zero-knowledge proofs. Zcash uses zk-SNARKs, an inventive form of zero-knowledge cryptography. The strong privacy guarantee of Zcash is derived from the fact that shielded transactions can be fully encrypted on the blockchain yet still be verified as valid under the network’s consensus rules using zk-SNARK proofs.
The acronym zk-SNARK stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge” and refers to a proof construction where one can prove possession of certain information (for example, a secret key) without revealing that information.
In order to be private yet still allow users to remain compliant with regulatory bodies, an owner of an address may choose to disclose their z-address and transaction details with trusted third parties through the use of view keys and payment disclosure.
The two Zcash address types are also interoperable. Funds can be transferred between z-addresses and t-addresses.
In terms of price, Zcash has been falling off a cliff since June 2018. It was during this time that the 20-day EMA crossed the 50-day EMA to the downside, which is a really bearish signal. Soon after, the market collapsed, and Zcash has since been trading lower and lower against BTC every month.
ZEC went from around 2,900,000 satoshis to about 786,000 satoshis at its lowest point during mid-May 2019. That’s a 72% drop in less than one year.
During this month, we saw a small recovery when ZEC went from its lowest point up to about 1,020,000 satoshis – a 20% increase in just a few days. It has corrected since then, but it seems to be holding close to its support around 860,000 satoshis.
If ZEC is able to hold the line and avoid new lows, I’m expecting buyers to remain in charge and price to start moving in an upwards direction for a longer period. It all depends on BTC’s performance against the USD. However, from a fundamentals perspective, I don’t really see a reason for a sudden decline.
Verge
Verge (XVG) is a cryptocurrency built with an emphasis on privacy and confidentiality. The XVG token utilises anonymity-centric networks such as TOR and I2P to make sure the IP addresses of its users are obfuscated and transactions are completely untraceable.
Verge started as DogeCoinDark back in 2014 before undergoing a rebrand in 2016, which makes it one of the older anonymous coins available.
Much like Dash, Verge wasn’t originally built for privacy, meaning its core protocol simply hides transactions through transaction mixing and IP addresses with multiple layers of routing.
XVG is used primarily for its cheap transaction fees and quick transaction speeds.
Looking at XVG’s price performance, we can clearly see it has been in a bearish downtrend since early 2018. It has lost close to 85% of its value during this bear market. Now, it seems buyers are back in business and want price to move in an upwards direction.
At the moment, XVG is trading close to its 20-day EMA at around 124 satoshis. If XVG is able to remain above its 20-day and 50-day EMAs over the next few weeks and find new support around 165 satoshis, I don’t see a reason for price not to explode. There’s loads of volume around 165 satoshis, which means if Verge buyers remain on top around this level, we could soon see XVG moving in an upwards direction.
We also shouldn’t forget that XVG survived a 51% attack during 2019 – a clear sign of strength.
Even though it might be too soon to make an entry, I’m definitely starting to pay close attention to Verge, as I feel the time to make a new buy could be arriving soon.
Grin
Grin is a brand new cryptocurrency released in 2019 with the goal of allowing users to transact completely privately and quickly. Grin’s aim is to allow for a private cash-based system. As such, its blockchain is incredibly scalable.
The technology behind Grin is Mimblewimble, which contains confidential transactions that allow for public verification of transactions without revealing any significant details such as amounts or addresses.
Simply put, in Grin, there are no transactions or addresses. The blockchain is like a huge UTXO that keeps updating with new transactions, meaning each user keeps their own record and the ledger just records the latest blockchain state. Grin is the earliest implementation of Mimblewimble and is completely open source.
Much like Verge and Dash, Grin has been quite bearish during the past few months.
Because it is a very recent implementation of the newest privacy and fungibility focus protocol Mimblewimble, the market has been quite unsure about its fundamentals, which is clearly reflected in its price.
From late March until mid-May, Grin has lost about 80% of its value against BTC, falling from 110,000 satoshis to close to 23,000 satoshis. At the moment, it’s currently trading around 28,000 satoshis, about 3% higher than its bottom.
Grin still has quite low volume, meaning it’s a dangerous coin to trade and invest in. Nevertheless, fundamentals remain quite strong and I expect that to reflect in price over the year.
Safe trades!
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.