Privacy coin

A privacy coin is a cryptocurrency purpose-built to hide the details that public blockchains normally expose: who sent a payment, who received it, and how much moved. Bitcoin and most other coins are pseudonymous, meaning every address and amount is visible forever to anyone with a block explorer. Privacy coins instead use cryptography to break the links between sender, receiver, and transaction history, so balances and payment flows cannot be traced on-chain.

Different projects reach this goal with different tools. Monero applies ring signatures to obscure the true sender among a group of decoys, one-time stealth addresses to hide the recipient, and Ring Confidential Transactions to mask the amount, all applied by default to every transaction. Zcash instead relies on zero-knowledge proofs, an approach descended from earlier work like the Zerocoin protocol, letting users choose an optional "shielded" transaction type where funds are verified without revealing sender, receiver, or amount. Dash offers a lighter, opt-in mixing feature called CoinJoin rather than mandatory privacy.

These properties make privacy coins attractive for legitimate financial confidentiality, but the same features that block outside surveillance also make transaction monitoring difficult for regulated exchanges, which has driven a wave of delistings and country-level trading restrictions in recent years. Users seeking privacy beyond the blockchain layer often also route wallet traffic through networks like TOR to hide their IP address, since network metadata can otherwise undermine on-chain anonymity.