Monero is a private, untraceable, and decentralized cryptocurrency.
Monero is functionally quite similar to Bitcoin, however the sender, receiver, and amount of transactions are not publicly visible.
Unlike Bitcoin, Monero is fungible and does not have high fees, meaning that it is much more useful as a digital currency.
While Monero offers full privacy by default on all transactions, the user is able to optionally disclose a "view key" to 3rd parties for auditing purposes,
which allows them to view (but not spend) any incoming payments to the user's address.
See the "Monero wallets" section for some wallet options.
rating: 4.5/5
pros:
- completely fungible
- private on all transactions
- full privacy (sender, receiver, amount)
- low transaction fees
cons:
- requires scanning for incoming payments, which can be slow
- de-listed from many exchanges; hard to obtain in some places
Coinjoin is a privacy technique for Bitcoin where users' funds are mixed with each other in order to obfuscate the source of the newly-mixed coins.
This process is trustless, meaning that it is impossible for anyone to steal your coins.
Whirlpool is a specific implementation of Coinjoin, developed by the creaters of
Samourai Wallet.
When entering the "mixing pool", all mixes after the first are completely free, though re-mixing is known to be slow.
When funds are spent, they exit the pool.
Unfortunately, using Coinjoin can result in many services rejecting payments, because mixing coins is seen as suspicious.
It also requires specific denominations to be mixed, and often creates large amounts of "toxic waste" money which cannot be spent without risking deanonymization.
rating: 2.5/5
pros:
- 0 fees after first mix
cons:
- requires specific amounts
- creates "toxic waste"
- re-mixing is slow
- harms fingibility
Tornado Cash is a privacy tool for Ethereum, Binance Smart Chain, Polygon, and more.
It leverages a technology called zk-SNARKs to completely and fully break the link between a depositing address, and a withdrawing address.
While this technique offers "perfect" privacy in terms of obfuscating the user's transaction history, it requires a trusted setup,
meaning that the security of the system is completely dependent upon the honesty of the developers and people who contributed to generating a secret key.
zk-SNARKs is also a relatively new technology, and has not yet been definitively proven to be secure.
Currently, Tornado Cash requires specific denominations to be deposited, although there is an expirimental version which supports arbitrary amounts.
Tornado Cash also recently announced that they will be banning certain addresses from using their web service,
although users can still access the smart contract directly on the Ethereum/other blockchain.
rating: 2/5
pros:
- "perfect" hiding
cons:
- requires specific amounts
- censorship
- trusted setup
- new cryptography
