Privacy Coins May Have ‘Communication Issues’

Written by: Zane Huffman. Zane is a veteran freelance writer in the cryptocurrency space since 2013. His work ranges from breaking news and live journalism to technical tutorials and developer documentation. Zane’s pinpoint areas of focus in the space lie in privacy coins and blockchain gaming.


Many cryptocurrency projects claim to offer financial privacy. But just masking transaction data isn’t useful on its own, and privacy coins will fail if they don’t provide the mechanisms necessary for true privacy.

Opaque blockchains, untraceable transactions, and private addresses are all essential elements of any cryptocurrency designed to protect user privacy. And there are many, many privacy coins which claim to provide these, with varying degrees of success. However, these components are just ONE part of the privacy formula, and maybe not even the most important part.

As development teams compete to provide private transactions in ever more efficient and secure ways, they are repeatedly ignoring other necessities and leaving their users exposed: specifically, what’s the point in putting so much effort and computing power into making transactions private, if we still have to use insecure methods to arrange those transactions in the first place?

The Communication Problem

In a free and fair financial transaction, currency must change hands in exchange for a good or service deemed of equal value. If we’re bartering, this fair-value exchange requires some level of communication to agree on a mutually agreeable price.

Of course not many people haggle nowadays, but even shopping at fixed prices requires communication. When businesses and individuals transact using a privacy coin, they still need some channel through which they can communicate pertinent information, such as the cost of the goods and the payment addresses associated. Then the purchase actually has to be delivered. Transactions involving…

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