Cryptocurrency dominance and popularity as the most valuable decentralized digital token are not disputable. Nevertheless, it is also not devoid of challenges. One of the major issues facing the cryptocurrency network is its transaction privacy problem. In a bid to handle cryptocurrency privacy issues, some efforts have been made.
One of such initiatives is the introduction of several altcoins (alternative cryptocurrencies unveiled after the excellent performance of cryptocurrency) in the market with a keen emphasis on privacy. It is quite evident that the great response of privacy-centric coins like Zcash (ZEC) and Monero (XMR) is an indicator of the gap in transaction privacy in the cryptocurrency world, specifically with regard to cryptocurrency. Also, hard forks like Bitcoin Private (BTCP) have focused on offering privacy on deals and at the same time optimizing Bitcoin’s brand recognition.
As much as the introduction of privacy coins in the market is good for the crypto world, the majority of cryptocurrency users maintain that it would be best if the cryptocurrency network could step up its privacy. The major challenge with bolstering Bitcoin’s network security lies in the fact that there are no officials to sign the paperwork for cooperation contracts with security and privacy solution providers. Perhaps the reason behind the challenges with agreeing on the Bitcoin Core upgrade is to curb unilateral implementation of changes by aspiring leaders.
Here are three technical proposals aimed at improving cryptocurrency privacy:
There is a possible risk during diffusion (the process of transaction broadcast in the cryptocurrency network) of ill-motivated actors operating as nodes, who pick up the transactions and trace them back to their source. As such, the possibility of establishing the sender’s IP address is very high. Dandelion is an innovative way of sending transactions using unsystematic passageways to a variable number of nodes, hence making the tracing of the sender more difficult. Still, you may better acquaint yourself with the issue of increasing Bitcoin’s privacy and share your knowledge on it and other Bitcoin matters with other cryptocurrency enthusiasts.
Numerifides Trust Consensus Protocol
Numerifides is a proposal by Tyler Hawkins, a developer who suggests having a system that allows the inclusion of secure, decentralized, and human-readable names and other data on the cryptocurrency network. These three variables are known as Zooko’s triangle. However, this proposal has privacy concerns, one being the possibility of users creating aliases and using them to transact on the network. Two actions happen in the creation of data through the Numerifides proposal. The first is that a user must lock up a specific amount of Bitcoin. The other is that they must avail proof of work (PoW) confirmation. The security of data is directly proportional to the amount of the time-locked Bitcoin and PoW. A proposal is an interesting approach to attaining secure and confidential data on the Bitcoins network. It may have some impact if it is approved and implemented.
Mimblewimble seals the gap left by Dandelion, which protects only the sender’s privacy. The proposal is meant to improve the chain privacy—the sender and recipient—the amounts transacted, and so many other possible identifiers. It is intended to ensure that all dealings are private by default. The proposal was by Grin and Beam. However, on political and technical grounds, it is highly likely that Mimblewimble will not be integrated into cryptocurrency Core or cryptocurrency Cash to enhance privacy. Maybe it will be attached to BTC as a sidechain. That way, all users will deal privately on the Mimblewimbe sidechains without threatening the security of the main chain or subjecting absolute privacy to BTC users who may want nothing to do with it.