When Bitcoin first came on the scene over a decade ago, everyone thought it was anonymous. So much so that it was used in online Darkmarkets for illicit purchases. These days we know that every Bitcoin transaction is public and data analytics companies make it their business to trace payments across the blockchain.
Bitcoin’s transactions are resistant to being stopped (censored) but they are open for all to see.
This is a problem for everyone, not just those doing illegal transactions. Companies don’t want their financial dealings made public, campaigners in oppressive regimes don’t want their transactions tracked by the state and average members of the public don’t want their savings open for all to see.
Furthermore, even if you don’t mind people seeing what you are spending, what if someone that once held your coins did something that your government doesn’t like? If a coin can be traced back to all its previous users, companies could be forced to refuse coins based on their previous owners’ actions.
The solution is privacy coins. These coins obfuscate the true source of transactions. They aim to offer the privacy that people thought Bitcoin offered.
Two prominent examples of these are Monero (XMR) and Zcash (ZEC).
Monero uses a technology called Cryptonote. This uses what are known as ring signatures which basically moves the coin in such a way that it is hard to work out where the transaction originated.
Although Monero offers a high level of privacy, because the mixed transactions are still visible publicly there remains a risk that transactions could be decoded at some later stage.
ZCash has a better privacy technology known as zk-SNARKs. This allows transactions to be sent that do not reveal most of the data about the amounts or parties involved. However, Zcash does not require all transactions to be done via its privacy technology. This means that only a small number of users do so. Because the number of private users is small, this means the potential for privacy to be broken is increased.
PIRATE (ARRR) uses the same technology as Zcash but requires its use on all transactions (other than the first transaction when it is initially created i.e. mined). This gives it the highest degree of privacy available.
The project’s website explains it like this:
Written in the code of Pirate Chain is a vast treasure chest (pun intended) of cryptocurrency firsts, along with a secure way to prevent hostile attacks on the chain and keep user’s transaction data private. Pirate Chain does not leak any transaction meta data, allowing every transaction to stay private. Proof of this is given on the block explorer (the place where you can see the transactions that occur. All cryptocurrencies have one). When you view the block explorer, you will notice that transactions occur, but the addresses they are sent from are not there, the addresses they are sent to are not there, and the amount transacted is not shown, only the transaction fee. This is one of many proofs that show users that their data is safe and private.
Mining Pirate Chain works very similarly to how Bitcoin mining works (which was talked about in Part II of this series). The key difference between them is that Pirate Chain mining is private, not allowing anyone to see how much was mined per address on the block explorer. This allows users to feel confident that whether they are transacting with others, mining or purchasing things, no data is compromised. Nobody is able to see how much you have in your wallet or trace anything back to you. Simply put, it works exactly how privacy should work, what’s your is yours and not visible to anyone but you.Pirate Chain – The Ultimate Privacy Coin
Pirate Chain is currently a small project ranking 299 on Coin Market Cap. But the fundamentals of this project make it one to watch! It seems likely to me that we will see this project doing rather well and many early investors could make a healthy return. On the other hand this project may not do well despite the fundamentals, as is the case with many crypto projects.
What you do with this information is entirely up to you. This is not financial advice.