Satoshi Nagamoto, in 2009, released Bitcoin to the World. This technology has the potential of defining the future century.
By default, blockchains protect transactions at a higher level than centralized payment networks. Proof of Work (PoW), and Proof of Stake(PoS) are decentralized consensus methods that enable cryptocurrency networks without any central authority to settle transactions.
But experts in cryptocurrency are questioning whether the level of privacy provided is adequate given modern anti-privacy techniques.
Blockchain: Is it private or public?
Banks and centralized payment networks like Visa have no choice but to record personal transaction data – sender and receiver names, amounts, times, locations, and often the types of goods or services purchased – in order to facilitate the movement of money and protect users from fraud.
Blockchains offer privacy advantages, but they can be difficult to use. Blockchains store all transaction amounts and sender/receiver wallet addresses permanently for everyone to view. Bitcoin.org explains this in detail:
“All Bitcoin transactions are public, traceable, and permanently stored in the Bitcoin network. The only way to determine where and how bitcoins will be sent is by using Bitcoin addresses. These addresses are created privately by each user’s wallets. But once an address is used, it becomes tainted with the transaction history. Anyone can see the balance and all transactions of any address.”
In an effort to conceal the origin and destination of transactions, many people have turned towards tumbling services. Both adversaries and researchers have 12 years experience in high volume blockchain transaction tracing. Blockchain analysis software allows you to quickly trace and associate wallet addresses.
Most people get into the cryptocurrency market via centralized exchanges, such as Coinbase. They require all members to undergo KYC (Know Your Client), which is used to verify individuals’ identities in line with regulations. This means that all transaction chains originating from centralized exchanges are traceable and easily tied to their members’ real identities.
It is clear that an update is required if we want to preserve our financial privacy and, to a lesser extent, our freedoms.
Blockchain Privacy: Improving
Some cryptocurrency projects, aptly named “privacy coins”, have taken it upon themselves to solve the privacy gaps in previous-generation blockchain protocols.
PIVX and Zcash are very popular, however, the community is increasingly concerned about their ability to keep pace with ever-changing privacy demands. Many security professionals are now turning to Navcoin instead, a futuristic privacy project which supports both public and private transactions via its NAV token.
xNAV uses Navcoin’s self-developed privacy protocol “blsCT” to protect transaction data from prying eyes. BlsCT accomplishes this by combining all transactions within a block in one and then distributing xNAV to wallets, without revealing the addresses or balances. It effectively breaks down the connection between transactions inputs and outputs making it difficult to determine which wallets were involved in what transactions.
xNAV protects user privacy further, by eliminating a danger factor most crypto users don’t know about: IP tracing.
When a transaction is sent through a cryptocurrency network, the sender’s IP is revealed to neighboring nodes. It is possible to track the origination and physical source of transactions by linking transactions with IP addresses.
xNAV does this by using Dandelion++ as an alternative technology. This technology sends the sender’s IP addresses initially to a single node. It then connects with another node to act as the original sender. This chain continues a random number of times, obfuscating the original sender’s IP address, making it impossible to correlate transactions with IP addresses.
An extremely useful privacy platform
While Navcoin’s privacy protocols are impressive, they aren’t the only reasons behind Navcoin’s recent attention.
Navcoin, which will offer privacy as a platform soon, can now be used to create a privacy platform with high utility that is compatible with other cryptocurrencies. As all network fees are paid for with it, this will dramatically increase demand for Navcoin.
As part of its offerings, Navcoin’s platform will support Private Tokens and NFTs, allowing users to mint NFTs along with tokens pegged to the values of other assets, all with the same privacy-preserving aspects used by xNAV.
The implications of this are broad – including the potential for users to mint private versions of cryptocurrencies, and trade privately, removing KYC from the process of gaining exposure to mainstream cryptocurrencies like Bitcoin and Ethereum.
As revolutionary as it is, blockchain technology needs an upgrade if it’s going to keep up with the anti-privacy tactics of institutions and adversaries. Navcoin leads the way with xNAV, an innovative privacy coin that solves today’s privacy concerns.