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FxWirePro: A comparative study of major privacy-focused cryptocurrencies – Monero, Zcash, Zcoin, PIVX

Privacy coins are the cryptocurrencies which are fully anonymous and untraceable. There are various privacy coins and major ones include

  1. Monero
  2. Zcash
  3. Zcoin
  4. PIVX

1. Monero

Monero coin was originally forked from Bytecoin and is a secure private untraceable coin. Monero uses RingCT privacy technology.It provides privacy through unique features such as

  1. For senders (Ring Signatures)
  2. For receivers (Stealth address)
  3. For the transaction (Ring CT (Confidential transaction)

Monero, which was previously known as Bitmonero, is the first coin to use CryptoNote technology. Cryptonote is next generation platform useful for creating anonymous and secure cryptocurrencies.

Crypto Note:

It is an open-source technology and concepts for the cryptocurrencies of the future. The main features are

  1. Untraceable payments
  2. Unlinkable Transaction
  3. Double spending proof

Untraceablity:

Monero uses a special technology called ring signatures which shuffles users public keys in order to eliminate the possibility to identify a particular user.

Ring signatures:

Ring signatures is a type of digital signatures that can be performed by any member of a group of users that each have keys. A ring signature is composed of the actual signer who is then combined with non signers to form a ring and it helps to mask the origin of transaction. All members are considered equal and valid in this ring.

Stealth Address:

Stealth address is technology used for protecting the privacy of the receivers of cryptocurrencies. It requires sender to create a random one time address for given transaction so that different payments made to the same payee are unlinkable.

RingCT: It is nothing but Ring Confidential Transaction (CT) used in Monero to improve transaction privacy by hiding the transaction amount sent.

Monero is fungible as every transaction is private by default. Monero hides sender, recipient address and transaction amount.

In Monero transactions are confirmed by distributed consensus and immutably recorded on the blockchain. Third parties do not need to be trusted to keep Monero safe (no trusted setup).

Monero has 2900 full nodes online higher the number more decentralized and secure.

Monero Scalability and transaction costs:

On an average, Monero blocks are mined every 2 minutes and its transaction confirmation time takes about 20-30 min on an average. Monero has implemented dynamic size limit and it gets changed by itself. It doesn't have hard coded maximum block size and so penalty fee charged for large transaction.

One more major negative factor to be noted is Monero’s higher transaction costs and their average transaction fee is $3.21.

Pros:

  1. It can give high privacy due to ring signature feature
  2. Transactions can’t be linked and traced.
  3. No blocksize limit.
  4. Hides recipient, sender addresses and transaction amount
  5. Private on default

Cons

  1. It has only few wallet support due to high privacy feature
  2. Transactions cost are very high
  3. They have concentrated mining and almost 35% of mining is controlled by only four large pools.
  4. Monero transactions are significantly larger than other crytpos because of encryption involved. So it has scalability issue.

2. Zcash

Zcash is a privacy protecting, digital currency built on strong science. It is Bitcoin forked and uses zk-SNARKS (Zero knowledge Succinct Non-Interactive Argument of Knowledge proofs for privacy.

Unique features of Zcash are

  1. Low transaction fees
  2. Optional privacy
  3. Z-addr to t- addr transactions
  4. t-addr to z-addr transactions
  5. Hides sender and receipt address and also amount send

Zero-knowledge proof is a method or process where one person (the prover) can prove to another party (the verifier) that something is true without revealing any information apart from the fact that this specific statement is true.

There are four types of transactions in the Zcash network

  1. Public transactions - where all transactions and amounts are revealed.
  2. Shielded Transactions - Zcash supports two types of addresses “t-addr” or transparent address and “Z- address “or shielded addresses. Transactions happens between “t addr “ to “z-addr’’.
  3. Deshielded transactions - Private address to Public address, where the transaction amount is revealed through the deshielded transaction but the total balance in private address gets shielded.
  4. Private Transactions - z to z-addr where both addresses and transaction amount gets encrypted and not public visible.

Zcash Scalability and transaction costs:

New blocks are created roughly every 150 seconds and maximum block size 2 MB. The average time needed to create private transaction is 60 sec. Zcash Transaction per second is 27 and transaction cost is $0.001.

Pros

  1. Selective Privacy
  2. High anonymity
  3. Zcash has proper wallet support with Ledger Nano S and Trezer.
  4. Low transaction fees

Cons

  1. Requires trusted setup
  2. Proof size are large
  3. Takes longer time to create private transaction

3. Zcoin

Zcoin is anonymity and privacy oriented cryptocurrency which uses Zero knowledge proofs via Zerocoin protocol.

Zero- knowledge proof or Protocol

It is a method by which one party (prover) can send and receive coins without disclosing which specific coin belong to them. The term Zero knowledge proof means that no information about the secret is revealed, but second party called as Verifier is convinced that first party called as prover knows the secret.

Zerocoin works by allowing you to burn coins (otherwise known as Zerocoin mint) and later redeem an equivalent number of brand new coins (known as Zerocoin spend). It provides larger anonymity compared with other privacy crypto. These new Zerocoins have no transaction history and lot of users minting coins at the same time it becomes impossible to trace the newly minted coins to particular user.

To mint a Zerocoin, a person generates random serial number S and encrypts this into a coin C by use of second random number R. These two numbers are used in cryptographic function to generate value “V”. The value V is posted to the blockchain to prevent it from being changed in the future.

Zcoin Scalability and TPS

Zcoin has high block time 10 min and maximum block size is 2MB. The average time needed to create private transaction is 2-3 sec. Zcoin Transaction per second is 14 and transaction cost is $0.13.

Pros

  1. No need of mixer
  2. Does not require trusted third party to provide anonymity

Cons

  1. Zerocoin does not hide transaction values.
  2. Requires trusted setup

4. Private Instant Verified Transaction (PIVX)

PIVX is a privacy focused cryptocurrency based on a fork of DASH v0.12.0x core with Proof of Stake consensus mechanism with focus to improve some of the issues of Bitcoin like scalability and practicality.

Major PIVX features are

  1. SwiftTX: Transaction time is instant using “SwiftTX”. Transaction confirmation are done by the masternodes instead of needing the networks approval. SwiftX transaction are confirmed and spendable within seconds.
  2. Zerocoin PIV (zPIV): This features allows users to spend anonymously.It is mix of POS and zerocoin protocol.It reduces spend transaction size by 25% and increases the speed of verification and network performance. It helps to hide coin balance and transaction history. It takes 0.5 seconds to mint and 2.54 seconds to spend ZPIV.
  3. POS 3.0 Bitcoin Core 0.010x: PIVX is the first Proof of Stake cryptocurrency to be based on the version 0.10 or higher Bitcoin codebase. Proof of Stake is a method of distributed consensus and rewards are given to stake holders who holds PIVX in a wallet.
  4. Masternode: Masternodes are mighty elements of PIVX network. These are nodes running the same wallet software on the same blockchain to provide extra services t othe network. To run a masternode we should dedicate 10,000 PIV as collateral. The major services provide by masternodes are anonymization increased privacy of transactions,instant transactions ,decentralized governance and budgeting system.
  5. See-saw algorithm: PIVX has developed See-saw reward balance system. Higher the masternode count, the smaller the reward portion of each POS block that will be paid out to the customers. Conversely when the masternode count falls, the masternode reward portion is increased and staking node reward portion decreased.

PIVX Scalability and TPS:

PIVX has high block time 1 min and maximum block size is 1MB. The average time needed to create private transaction is 2-3 sec. Transaction per second is 70 and transaction cost is $0.003.

Pros

  1. It is fast and has low transaction fees.Instant transaction is possible using technology “SwiftTX”
  2. It uses Proof of Stake consensus mechanism so rewards and coin creation directly goes to PIVX owners not miners
  3. PIVX can be stored in Hardware wallet
  4. Passive income can earned through its masternode system.

Cons

  1. Unlimited coin supply
  2. No trusted setup
  3. It doesn’t hide transaction amount

Comparison of Privacy coin:

The table shown below indicates comparison of Privacy based on privacy technology, scalability and coin economics.

Monero

Zcash

Zcoin

PVIX

Coin Economics and Scalability

Consesus Mechanism

Proof of Work

Proof of Authority

Proof of Work

Proof of Stake

Mining Algo

Crypto Night

Equihash

Lyra2z

Proof of Stake

Block time

2 min

2.5 min

10 min

60 seconds

TPS

Adaptive block size

56

70

14

Private transaction time

1 sec

60 sec

2-3 sec

2-3 second

Transaction cost

$3.15

$0.0001

$0.13

$0.00

Instant Transaction

No

No

No

Yes

Master Nodes

No

No

Yes

Yes

Privacy Specs

Privacy Tech

Ring singature

zk-SNARKS

Zerocoin

zPIV

Accounts Viewable

No

"t" addresses viewable and "Z" addresess shielded

Visible

Visible

Master Nodes

No

No

No

yes

Optional Privacy

Yes

Yes

Yes

Yes

Trusted Setup required

No

Yes

yes

yes

Hides Sender and recipient address

Yes

yes

Yes

yes

Hides Transaction amount

Yes

Yes

No

No

Full Nodes Online

2900

1200

1700

2100

Private By Default

Yes

No

No

No


Conclusion

Monero is highly rated privacy currency it is only currency that is untraceable,untrackable and unlinkable. The only problem with Monero is scalability issues. The transaction size and cost are very high.

Zcash also hides transaction amount like Monero but it uses zk-SNARKS privacy technology which takes more time to private transaction.

PIVX is so fast and has less transaction fees . It is the early adopter which uses Proof of Stake consensus mechanism. It can privately send coins without being traced using Zerocoin Protocol (ZPIV). It uses “SwiftTX” to create instant transaction. But only drawback is that it will not able to hide transaction amount. But it is very much undervalued

Technical:

Monero (XMRUSD):

Monero was trading lower following footsteps of Bitcoin and lost more than 50% in this month. The pair hits low of $53.10 and is currently trading around $60.73.

It has formed temporary top around $379.90 Mar 5th 2018 and shown huge sell-off of more than 80%. The near term resistance is around $74.46-76.70 (23.6% fib and 20- day MA) and any break above targets $84/$92 (55 day EMA)/$100 (89-day EMA). The pair should break above $120 (200- day MA) for further bullish continuation.

In the weekly chart RSI is around 32 nearing over sold zone and pair is expecting to show a bounce back till $100.

On the lower side, near term support is around $50 and any violation below targets $30/$16.

Zcash:

Zcash is trading weak for past 6-month and lost 84% from high of $381.75. It hits low of $61 shown a slight recovery. It is currently trading around $82.18.

The near term resistance is around $97 (20- day MA) and any violation above targets $110 (55- day EMA)/$121.90 (89- day EMA). It should close above $163 (200- day MA).

On the lower side, major support is around $60 and any break below confirms bearish continuation. A dip till $40/$30 is possible.

Zcoin:

Zcoin was trading weak and has lost more than 90% from high of $48.75 made on May 5th 2018. It hits low of $4.82 and is currently trading around $5.86.

The pair is facing strong resistance around $6.50 (23.6% fib) and any convincing break above targets $7.52 (20- day MA)/$8.80 (55- day EMA)/$10.18 (89- day EMA).

The major support stands around $4.80 and any break below targets $3.57/$3.

PIVX:

PIVX Major resistance is around $1.08 (55- day EMA ) and any violation above targets $1.22/$1.45.The minor resistance is around $0.89/0.960.

On the lower side, support is around $0.6299 low made on Nov 27th 2018 and break below that level confirms bearish continuation and a dip till $0.34 likely.

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2019-01-23 15:02:27
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