In brief
- A report released today by Coin Metrics notes there are plenty of privacy-centric options for sending digital money.
- However, crypto users are relatively uninterested in privacy coins such as Zcash, Monero, and Grin.
- But methods of making Bitcoin more private, such as CoinJoin, are on the up.
Crypto users are apathetic about privacy when sending money despite having more access to privacy protocols and features, a report released today revealed.
According to Coin Metrics' State of the Network report, the idea of anonymity is even at risk of “fading away” unless crypto’s “original privacy-oriented ethos” returns. This comes even as privacy options—such as Mimblewimble, a purportedly super-private protocol behind at least two new privacy coins—continue to emerge.
Coin Metrics, a crypto market and network data provider, looked at three privacy-focused cryptocurrencies: Zcash, Monero, and Grin. The report found that the combined daily transactions of those three coins only stands at around 6% of Bitcoin’s.
Privacy coin Monero falls by 10% after hitting year long high
The privacy coin, Monero (XMR), has fallen by 10% in the past 24 hours, from $102 to $92, according to data from metrics site CoinMarketCap. But the coin loved and lost. Early on Friday morning, the coin peaked at $105.5, its highest price since July 2019. It's likely that the coin was swept up in this summer's bull run. Indeed, at about $174 million, its daily volume is far higher than usual. In early June, when the crypto market was stagnant, perhaps due to the economic uncertainty caused by...
“For every transaction on one of these privacy assets there are 16 done on Bitcoin and countless more on assets that offer even less privacy,” the report said.
Moreover, those cryptocurrency holders who do use privacy coins aren’t necessarily maximizing those coins’ features. For example, despite Zcash having a fully private mode, fewer than 2% of transactions made with the currency use this method. The overwhelming majority of Zcash users choose to use transparent transactions or partially private transactions.
Monero and Grin, a newer privacy coin that utilizes Mimblewimble technology, are also proving relatively unpopular, despite offering much more privacy than Bitcoin.
Coin Metrics believes this is cause for alarm.
“As crypto-currencies continue to be adopted by the wider public, its [sic] original privacy-oriented ethos must be transmitted in order for it to survive,” it said. “Failing to do so could result in the original idea of anonymous transactions systems fading away and being superseded by other conceptions of what crypto-currencies are useful for.”
But the report did manage to strike a hopeful note about privacy trends within Bitcoin, still the largest cryptocurrency by market cap. It noted that interest in technologies such as CoinJoin, which allows users to “mix” their Bitcoins together to hide transaction history, is “growing quickly.”
