Advances in crypto have not aroused user enthusiasm, suggesting a disconnect between the cryptocurrency community and its cypherpunk ancestors.
According to Coin Metrics, zcash (ZEC), monero (XMR) and grin privacy-focused cryptocurrency transactions account for just 6% of Bitcoin transactions. Zcash’s privacy feature is significantly underutilized, with less than 2% of transactions fully protected.
Although coins offer more privacy than bitcoin (BTC), their reception is still disappointing. “For every transaction on one of these privacy assets, 16 are made on Bitcoin and countless others on assets that offer even less privacy,” Coin Metrics detailed in its September 1 report titled “Network State. : number 66 ”.
Coin Metrics, a crypto market data provider, is concerned that these statistics mark a departure from anonymity, which was a fundamental tenet of the initial design of virtual assets. The authors pointed out:
As cryptocurrencies continue to be adopted by the general public, its original ethics focused on privacy must be passed on for them to survive. Failure to do so could lead to the disappearance of the original idea of anonymous transaction systems and replacement of other conceptions of the usefulness of cryptocurrencies.
ZEC has a privacy feature that does not reveal any information about who trades or the amount traded. However, the recent crypto breakthrough it incorporates, known as zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge), is optional so that users can still use transparent transactions. According to Coin Metrics, only around 5% of all ZECs issued are currently protected and only 2% fully protected.
Grin uses the Mimblewimble protocol to aggregate transactions, hiding native transaction inputs and outputs. XMR aggregates a sender’s real coins with ring signatures. Apart from these coins, a privacy feature for bitcoin, Coinjoin, allows users to “shuffle” their coins to hide individual transaction records.
With statistics trending towards a dominant use of bitcoin, the increased encryption of crypto, thanks to new innovations such as Bulletproofs and Mimblewimble, is a case of optimism.
“We can also note a renewed interest in Coinjoin with providers like Wasabi and Samourai’s Whirlpool which, although representing a very small proportion of Bitcoin’s trading volume, are growing rapidly,” the Coin Metrics report said.
What do you think about the apathy of crypto users towards privacy? Let us know in the comments section below.
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