Two new wallets have been released, serving users of Bitcoin BTC and Bitcoin Cash BCH. These are Wasabi Wallet 1.0 and CoinShuffle respectively, and both debut new privacy features that closely mirror DASH’s anonymity service offerings. While both new features may bring near-perfect anonymity to BTC and BCH, some question the way in which anonymity was achieved, still touting DASH anonymity as the superior option.
Why is Anonymity Important in Cryptocurrency?
Obviously, some people want cryptocurrency to be anonymous so that they can use it as money without their transactions being recorded or traced. This is a problem for users of both Bitcoin and Bitcoin Cash. While it’s a persistent rumour that Bitcoin transactions are anonymous, they aren’t really. Bitcoin is considered pseydo-anonymous. Transaction records exist on the public ledger, and authorities can connect these transactions to specific persons if they have reason to.
But anonymity is more than simply a way to make sketchy purchases. An anonymously transacted currency is fungible currency, and fungibility is a necessary trait for all successful currencies.
When a currency is fungible, one unit of that currency is totally interchangeable with any other equivalent unit. A £1 coin is fungible with every other £1 coin, for example. Because Bitcoins are linked forever to their transaction histories, they’re not technically fungible. An individual could refuse to accept specific Bitcoins if they have been used in fraud in the past, for example. If transactions were truly anonymous, all Bitcoins would become truly equal and therefore fungible.
How to DASH, Bitcoin, and Bitcoin Cash Achieve Anonymity?
DASH, Bitcoin, and Bitcoin Cash (through their respective wallets) now allow users to “mix” their transactions. Basically, if you want to spend 0.1 DASH for some purchase, your 0.1 DASH will be exchanged for some other person’s 0.1 DASH. You’ll never know whose DASH you received, and no one else would ever know either. The transaction will still be recorded on the blockchain, but its origins will remain mysterious.
DASH accomplishes this with a system built into the very nodes of the DASH blockchain. Bitcoin and Bitcoin Cash, however, require external solutions that rely on server transaction matching. This means that the mixing result is the same for the end user, except that a record of the transaction will continue to exist on a centralised server. Here, it could theoretically be stolen or leaked, though further levels of crypto encryption theoretically make this impossible.
Some critics think that this centralised server element nonetheless creates an attack vector that makes DASH’s node-based solution the superior option for people looking for anonymous digital cash. On the other hand, the BTC/BCH model may turn out to be amply secure, even without decentralisation. .
In our understanding, DASH is the preferable solution. Unlike other privacy coins like Zcash and Monero, DASH transactions are still broadcast to the blockchain, but decentralisation is not sacrificed as it is with BTC and BCH. Only time will tell what the markets of the world prove to prefer.
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