Privacy Coins and Privacy Technologies

What you'll learn

• The Two Approaches to On-Chain Privacy
• Monero: Mandatory Privacy in Practice
• Zcash, zk-SNARKs, and the End of Trusted Setup
• Zero-Knowledge Proofs Explained Simply
• The Modern Privacy Stack: Aztec, Railgun, Aleo, Iron Fish
• Mixers, CoinJoin, and Privacy Pools
• For Deeper Reading

Key terms

Ring signature

A cryptographic signature scheme where one of several plausible signers signs a transaction, and an outside observer cannot determine which one. Foundation of Monero's sender privacy.

RingCT (Ring Confidential Transactions)

Monero's system, mandatory since September 2017, that hides transaction amounts using Pedersen commitments and range proofs while still allowing the network to verify that inputs equal outputs.

Bulletproofs

A non-interactive zero-knowledge range proof deployed in Monero in October 2018, reducing transaction fees by roughly 97%.

zk-SNARK

Zero-Knowledge Succinct Non-Interactive Argument of Knowledge — a small, fast-to-verify proof that a statement is true without revealing why. Used by Zcash, Tornado Cash, and most zk-rollups.

zk-STARK

A scalable, transparent (no trusted setup) variant of zero-knowledge proofs, used by StarkNet and several other zk-rollup ecosystems.

Trusted setup

A one-time multi-party ceremony required by some zk-SNARK constructions to generate cryptographic parameters. If all participants are honest, the system is secure. Halo 2 (used in Zcash NU5, May 2022) eliminates the trusted setup entirely.

Halo 2

The transparent-setup zk-proof system deployed in Zcash NU5 (May 2022), removing the trusted-setup requirement that had been a long-standing critique of Zcash.

CoinJoin

A Bitcoin mixing protocol (Gregory Maxwell, 2013) where multiple users cooperatively build a single transaction with many equal-sized inputs and outputs to obscure the link between sender and recipient.

Stealth address

A receiving scheme where the recipient publishes a meta-address, but each payment goes to a fresh one-time on-chain address that only they can spend from. Used in Monero and standardized for Ethereum as EIP-5564.

Shielded pool

A set of obfuscated balances within a smart-contract or chain — for example, the Zcash z-pool or the Railgun smart contract — where transactions are private but deposits and withdrawals are visible at the boundary.

Privacy pools

A 2023 design by Vitalik Buterin and co-authors that lets users prove their deposits are not from a sanctioned set, providing privacy with a built-in compliance hook.

Selective disclosure

The ability to reveal specific facts (a balance, a counterparty, a tax-relevant flow) to a chosen party — like an auditor — without revealing your full transaction history.