It’s almost impossible to talk about privacy coins without mentioning the likes of Monero. You have to hand it to them; they’ve been around since 2014. However, there are many other projects (some arguably better) in the privacy niche. PIVX is one of the OGs that is often overlooked.
In this article, I’ll scrutinize both privacy cryptocurrencies, exploring their core technology, as well as their pros and cons.
Core Technology: Privacy by Default vs. Optional Shielding
The most crucial difference between PIVX and Monero lies in their implementation and philosophy of privacy.
Monero
Monero’s privacy is mandatory and built in for every single transaction, ensuring a uniform anonymity set. This commitment to default privacy is, in my opinion, Monero’s greatest strength. It uses three distinct technologies to ensure user privacy — Ring signatures, Ring Confidential Transactions (RingCT), and stealth addresses.
While ring signatures blend the sender’s signature with a group of non-spenders on the blockchain, making it cryptographically impossible to trace the actual spender, a stealth address allows the sender to create a one-time, unique public address for every transaction. RingCT hides the transaction amount, preserving confidentiality even from view-key holders.
PIVX
PIVX, on the other hand, combines optional privacy with an energy-efficient Proof-of-Stake (PoS) consensus and a self-governance model. Its current privacy technology is known as SHIELD, a highly customized and successful implementation of the zk-SNARKs.
Short for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge, zk-SNARKs allow a user to prove that a statement is true without revealing any information about the underlying data.
When enabled, transactions sent from one shielded address to another shielded address (SHIELD-to-SHIELD transactions) have the sender’s address, the receiver’s address, and the transaction amount completely hidden on the public blockchain.
Privacy vs. Practicality
- Consensus Mechanism: Monero utilizes Proof-of-Work (PoW) consensus. While this is highly secure and ASIC-resistant, it comes with high energy requirements. PIVX touts itself as the first PoS network to implement privacy features. As we all know, PoS offers lower energy consumption, faster block times, and rewards for staking.
- Compliance: Monero is difficult to audit, which is why it has faced severe regulatory scrutiny and delistings from major exchanges. PIVX, with its optional privacy option, allows users to transact transparently if needed for compliance. However, its optional nature may still raise regulatory flags.
- Transaction Fees: Like Bitcoin, fees on the Monero network can be higher and less predictable due to congestion and the large size of the private transaction data. Meanwhile, fees on the PIVX blockchain are near zero and more predictable, enabled by the PoS structure.
Conclusion
Monero is the choice for the purist. It is a fundamental, uncompromised digital cash system where privacy is a guarantee, not an option. Its strength is in its mandatory nature, which creates the largest possible anonymity set. But the cost of this is high energy consumption and increasing regulatory pressure that limits its accessibility.
PIVX, on the other hand, represents a more modern, pragmatic approach. By embracing Proof-of-Stake, it offers a fast, energy-efficient, and self-governed network. Its optional privacy (SHIELD) provides users with a choice, catering to both the privacy-minded and those who may need transparent transactions for compliance. However, this optionality is the very thing that, in the eyes of Monero enthusiasts, makes its privacy less robust.
Ultimately, both projects are essential to the privacy coin ecosystem. Monero defines the gold standard for confidentiality, while PIVX pushes the boundary of what’s possible in an efficient, self-governing chain.
Written by Clement Saudu
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