What is Privacy? The Key to Freedom in Crypto

Privacy is an essential element for the development of Crypto. Privacy in Crypto not only ensures freedom in investment and speculation, but it is also a shield to protect users. There are many solutions being developed to protect Privacy when participating in Crypto, each with a different development rate.

Let’s find out in detail what Privacy in Crypto is and its importance!

What is Privacy?

Privacy or privacy is a state of freedom where the subject is not observed or tracked by anyone or anything.

This is especially important with blockchain, as we now not only transfer information on the internet, but we also transfer value. A large amount of assets are being sent back and forth daily, requiring a better form of privacy protection, especially for big names looking to enter the Crypto market.

Common misunderstandings about Privacy in Crypto?

Blockchain provides us with an infrastructure so that anyone can freely participate anywhere, anytime without having to sign up for cumbersome procedures. Just like if you want to use a dapp, we just need to download a wallet and create a seedphrase.

We can create as many wallets as we want without revealing any information, and it is for this reason that most people think that their privacy is guaranteed because no one knows who they are.

This is true, but in reality, users usually only use one or two wallets and they often accidentally reveal information during use. Try to recall if you have ever written your wallet address in an airdrop or whitelist receipt form? Or simply give the wallet address to someone else?

It seems that the above is harmless, but it is accidentally disclosing your information and making your privacy no longer available, this reason comes from the transparent nature of blockchain.

Blockchain is basically an electronic ledger where all the information stored on it is easily observable by anyone. Every transaction, every action of a user on the blockchain is recorded on that ledger, and just with a person’s wallet address, we can know exactly what assets they own, what they have done. what and what wallet addresses it is interacting with.

To better understand Blockchain and how it works, please refer to: What is Blockchain??

In short, Crypto user privacy is not guaranteed As we think, this creates a need for those who want their information to be secure when using blockchain.

Background of Privacy in Crypto

Ongoing events and related to Privacy in Crypto:

Financial institutions, big names are participating in Crypto more and more: Individuals and organizations with financial potential and large followings are pouring into Crypto.

Before, I remember there was an incident about the little guys against the giants in the Gamestop stock exchange. In just one week, many amateur stockists have created pain for many hedge funds, causing billions of dollars in losses, by simultaneously buying shares of GameStop, the retail chain video game. The event shook the US stock exchange.

The reason for this came from the fact that a group of members of Reddit got information that some hedge funds are shorting Gamestop stock together. The members who heard the news spread the word to the entire Reddit community and created a trend to buy the company’s shares to pump the price up. As a result, Gamesstop’s stock price increased several times and caused huge losses to hedge funds.

The example above is a testament to the importance of Privacy, when just a few small details leaked can have a big impact. This is even more true with blockchain when all user actions and assets are stored on the chain and can be viewed by others.

There have also been many scandals of the Venture capital funds (VC) in Crypto has been made public and it all comes from the exposed wallet address.

Privacy is a protective shield for each individual: Before, when we filled out a certain type of form, it would usually only be basic information such as name, age, gmail, (depending on the type of form, there will be additional addresses, phone numbers, …). However, with Crypto, in addition to the above information, we also provide our wallet address, and as I said above, as long as we have a wallet address, we can easily look up related information.

If you do not pay attention and use your main asset wallet, this is similar to “wearing gold on the street”, the risk of being attacked in real life is completely possible.

In short, Privacy in Crypto is not only ensuring freedom in investment and speculation, but it is also a user protection shield that everyone should equip themselves with.

How to hide yourself when participating in Crypto

From the information above, we can see that the main causes affecting privacy include:

• Others know who the owner of the wallet is.
• Transactions can be clearly seen on-chain.

Therefore, just finding solutions to help solve these problems can significantly increase our privacy security. Solutions include:

Protect basic information

Prioritize the use of secondary gmail and only provide basic information when it is necessary to fill out a certain type of form. Avoid providing sensitive information such as home address, phone number, etc.

In addition, services like VPN or Tor will also help you increase your anonymity.

The art of using a wallet

You should create yourself many different wallets, regularly backup keys and create new wallets periodically. Each wallet will have a different use such as a wallet to store assets, a wallet to join the mainnet, a wallet to participate in testnet, fill out forms,… This not only helps to increase the safety of assets, but also increases significantly. privacy when others only know your secondary wallet.

Remember every transaction between wallets can also be easily seen on the blockchain, the secondary wallet only needs to send money to the main wallet, the tracker can see the information of the main wallet so even better, these wallets do not should be connected.

To do this, I usually send assets to CEX exchanges and then transfer from CEX to the main wallet.

Learn about: What is CEX exchange??

Use services that help protect privacy

Currently, there are many services that help users protect their privacy and make it difficult to be tracked on-chain such as: Mixing service, infrastructure measures, Privacy token,… In the next section, I will give an overview. about models and list the most prominent projects working in this area.

Explore more: 4 Tips to protect the safest Crypto assets (2021)

Services to help protect privacy

Mixing Service

Mixing Service is essentially a pool containing assets, users deposit their assets (BTC, ETH, …) into the pool. That assets will be mixed with other people’s assets and then sent to the recipient’s address (minus a service fee).

Advantage:

This mechanism of operation is quite similar to sending money to CEX exchanges and then sending to other wallets from CEX exchanges, and it is very difficult to be tracked. However, the big difference is that with CEX, users have to KYC, and with Mixing Service, users will not need any procedures.

Defect:

Because of the nature of the Mixing Service as a pool of assets, there is a possibility that they will be attacked at any time and cause property damage to the users.

There is a project that is considered an icon in the field of mixing services, with a large number of users and has long existed and trusted to ensure anonymity. That is Tornado Cash ($TORN), the project will cut the connection between sending and receiving wallets, helping to ensure Privacy.

Infrastructure measures

Currently, there are quite a few infrastructure solutions applied with the goal of protecting users’ assets, for example:

• Secret Network is a smart contract platform built on Cosmos based on the Cosmos SDK, the focus of the project is on privacy. Secret Network allows developers to build decentralized applications while also protecting user data and protecting privacy.
• Keep Network is an off-chain data container. Allows smart contracts to use private data without exposing them to the public blockchain.

Root-based infrastructure solutions with the goal of giving users and organizations granular control over their data to increase blockchain coverage. However, the limitation is that the development will take a large amount of resources and time. Even after development is completed, the project must continue to think of ways to attract users, which is relatively difficult with today’s level of competition.

Privacy Coin/Token

Privacy Coins are coins/tokens developed with anonymity as a goal. Typical can be mentioned as Monero, Zcash,…

Each Privacy Coin have different privacy protection mechanisms. Take the example of Zcash, which encrypts transactions and allows users to choose whether to use a private or public wallet address. When making a transaction, you can choose to execute the transaction from a public address starting with the letter “t” or using a private address starting with “z”.

Although there are different approaches to the problem, they all help users to maintain privacy in their transactions. Since they are all tokens, their characteristics are similar to other tokens. Use cases are needed to create real demand from users.

Investment Opportunities

For me, it is equally important to find gems that protecting one’s own property. There was a time when I was hacked and lost assets in a wallet by a bad guy, fortunately the amount was not large but that is a lesson that I have deeply engraved to this day.

“Before making money, we need to learn how to keep it first.”

Therefore, I think we need to pay more attention to ensuring the security and privacy of our assets.

In terms of investment opportunities for those interested, I see a few opportunities as follows:

• Invest in Mixing service projects with tokens: Pretty much like you would rate regular projects, we can see their performance and the value they attract for the token.
• Invest in infrastructure measures: This way of investing is quite similar to investing in Ecosystem. You can see the growth rate of the system and evaluate whether the system can attract users and cash flow.
• Invest in Privacy Coin: If you pay attention, you will see that the capitalization of some Privacy Coins is very high and the number of users grows gradually over time. Therefore, one can consider investing in quality tokens.

Project of Privacy in Crypto

The more the Crypto market develops, the more privacy is needed. Privacy is necessary because they are freedom, only freedom promotes many development ideas, especially in the financial field. Therefore, it is highly likely that projects on Privacy will be used a lot in the future.

However, Privacy will only really grow if they are integrated naturally with the apps we use regularly today, allowing users to choose between making information public or keeping it private. .

There will be separate services for customers who are financial institutions, This is a large client file and one should keep an eye on developing projects for this purpose.

Epilogue

Hopefully, the above article has helped you understand more about Privacy in Crypto and have understood how to help ensure privacy when participating in this market. If you have any questions, feel free to share them at the bottom of the article or message on the Techtipsnreview insight group chat, Techtipsnreview is happy to answer your questions.

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Disclaimer: This article is for informational purposes only and should not be considered investment advice. Crypto investment is a very risky investment and you should only participate with the amount of capital you can lose.