Zcash, Grin, and Monero account for just 6% of the transactions in Bitcoin that users conduct. The Bitcoin mix also has a low percentage of transactions on the network.
Users’ lack of interest is the biggest obstacle that private transaction systems are facing in the world of Bitcoin and other cryptocurrencies, according to a report from blockchain analytics firm Coin Metrics.
The report states that “user apathy towards privacy is probably the greatest deficiency of current anonymous transaction systems.” This occurs despite constant advances in privacy in Bitcoin and the existence of cryptocurrencies focused on maintaining private transactions.
The combined daily transactions between the cryptocurrencies Monero (XMR), Zcash (ZEC), and Grin, which are focused on privacy, only reach 6% of the transactions in Bitcoin that users conduct. In other words, for each transaction in these cryptocurrencies, 16 have occurred in Bitcoin, as the study highlights.
Monero and Grin offer privacy in their transactions, allowing hiding the amounts, addresses, and order of transactions on their networks. The former uses a mechanism called CryptoNote, which generates a kind of “decoy” that confuses transactions. The latter uses MimbleWimble, which merges inputs and outputs to confuse the sender and receiver details of transactions.
Concerning ZEC, users can trade this cryptocurrency in three different ways. Some transactions are transparent, others are partially private, while others — the so-called “shielded” ones — offer greater privacy. Less than 2% of the activity in Zcash belongs to the latter type, as Coin Metrics argues.
The number of privacy options in Bitcoin is also not as representative, states the report. However, the analysts consider that there is “a renewed interest in CoinJoin with providers such as Wasabi and Samourai Whirlpool.”
Bitcoin, Other Cryptocurrencies and Renewed Interest in Privacy
According to the publication, the use of these tools “is growing rapidly, beyond the low percentage.” The use of mixers such as Wasabi and Samourai has been steadily growing this year.
An increasing number of blockchain surveillance companies have even been listing privacy-focused cryptocurrencies to their tracking services. For example, Chainalysis and Elliptic have joined Zcash, while governments like that of the United States are seeking options to track these types of transactions.
The US Internal Revenue Service (IRS) knows the services of this type of company well and has its eye on cryptocurrencies such as Monero, Zcash or Grin, in addition to the Bitcoin Lightning network or side chains.
Institutions insist against privacy based on the alleged use of these tools to hide illicit activities. However, Chainalysis itself has previously stated that most mixed bitcoins are not involved in illegal activities.
There has been an observable increase in the use of cryptocurrency mixers on the darknet markets to improve privacy practices in payments.
Other studies reveal a clear interest in improving privacy in these types of markets. Some sales platforms in dark markets have even chosen to accept payments only in Monero, the same as a medium associated with ISIS did this year.
By Alexander Salazar
