The rise of Proof-of-Stake (POS), has made huge changes in the crypto world, including the emergence of private POS crypto, which will be explored in the content below.
What is Proof-of-Stake in cryptocurrencies
POS is a less costly alternative to an existing consensus mechanism called Proof-of-Work (POW). POS is a protocol in which new blocks are produced and validated through staking. The participants (a.k.a nodes) will have to stake their cryptocurrency to the network and then be randomly chosen by an algorithm to become validators, instead of miners as in POW.
Although this process is designed to happen randomly, the node with a higher stake and longer coin age (the amount of time a node holds coins, at least 30 days) may have a bigger chance to be picked.
Those deposits will be frozen for a certain length of time, which is called the unbonding period. If the validator is no longer participating in the POS network, the stake will be unlocked after a while, not immediately. Although the money is locked, validators are incentivized to do so because of the reward. Whereas the reward amount is fixed in the POW system, it is variable in POS protocol and mainly depends on the number of validators participated at the same time.
Private POS crypto
Simply, a privacy coin is a cryptocurrency that is able to obscure its user’s data. It means that the confidential information, such as IP addresses, sent or received funds, and account balance, will be hidden in the blockchain network and only accessed by users. This can help crypto holders keep their identity and financial status away from hackers, technological criminals, governments, or business partners.
Private crypto is not a new concept. It has actually become increasingly popular in recent years. However, users may be much more familiar with private POW coins rather than private POS crypto. In fact, private POS crypto has fallen behind in both terms of quantity and popularity in comparison to POW ones.
Traders can easily name some of the private POW coins, for example, Monero, Zcash, Verge, Bitcoin Private, and so on, but still be vague about private POS cryptos available in the market. Therefore, the list of some private POS cryptos will be discovered right below in order to provide more information and suggest more options for traders to consider.
Dash is the most well-known name in the list of private POS crypto. In fact, Dash is not truly POS crypto. It still uses POW as consensus mechanism to mine new coins but also integrates the Masternode network of POS. Therefore, it is considered as a hybrid of POS and POW.
The use of Masternode bring to Dash the most crucial feature which is PrivateSend. Basically, this is a coin-mixing process in which at least three people are required to join. The request for a private transaction will be sent to the Masternode (which is known as a computer wallet that maintains and provides specific services in the blockchain).
Your request is matched with other transactions happening at the same time and the coins will be mixed up inside the network. This process contains several rounds that are independent of each other to help improve the level of anonymity of traders. Ultimately, crypto will come safely to receivers and all the details of involved parties and transactions will be completely hidden in the blockchain.
Another key feature of this crypto is InstantSend. As indicated in the name, this feature allows Dash transactions to be verified in a few seconds, almost instantly after users start a payment. This brings a big advantage for Dash when competing with other cryptocurrencies.
PIVX stands for Private Instant Verified Transaction and is designed to be a new generation of private POS crypto segment. PIVX is an upgrade aggregate of Dash and Zcoin, but eliminated the weaknesses of both predecessors.
Privacy is the most important feature that users are looking for in PIVX. This coin is completely anonymous and obscures all of the user’s information. This feature is achieved thanks to the use of Zerocoin Protocol. With the help of a separate private coin, called zPIV (with PIV denotes for PIVX, z is for Zerocoin), this protocol allows all the transactions to be made without linking them to the original coin’s history. zPIV is created, as a return for “burning” PIV in the network, and then used for the transactions.
The conversion rate between PIV and zPIV is 1:1, which means their values are the same and can be swapped to each other with a very small fee of 0.01 PIV. Besides that, PIVX also released zPOS (Zerocoin Proof of Stake) to offer users the very first private staking system in the crypto world.
Apart from privacy, PIVX is also integrated with SwiftTX. This feature enables near-instant transactions, similar to Dash, which allows PIVX users to complete transactions within a second with a nominal cost. One more unique point of PIVX is that unlike the other cryptocurrencies, PIVX has unlimited supply and can be continuously generated.
3. NAV Coin
Another name in the list of private POS crypto is NAV Coin. NAV Coin is the first cryptocurrency that switches from POW to POS as consensus method. However, it is still underrated in the market of the privacy-centric coin.
NAV Coin uses the NavTech subchain to protect the privacy of crypto holders. NAV Coins will be sent to a subchain of the main blockchain, instead of coming directly to the receiver. This subchain will pass the transaction around through multiple servers to make sure that no one is able to follow and trace the transaction details before it goes to final destinations.
Although the process may sound long, traders do not need to wait too long for a transaction to be completed. This fast transaction time is also an upside of this crypto. Besides that, the company also plans to develop and release more privacy-focused functions, such as fake transaction and dummy accounts, in order to increase the level of anonymity.
The list of private POS crypto should be longer with other names, for example, NIX, Beldex, Phore, and Particl. Each of them has its own unique features that can satisfy the diverse needs of users. However, those cryptocurrencies are still new with a low level of popularity and need more time to set a foothold in the market.
Another solution for private transactions in the crypto world.
Besides using private cryptocurrency, investors also have one more solution to protect the privacy of transactions. It is to send and buy crypto anonymously with Incognito Wallet.
With this mobile wallet, users do not necessarily invest in any private coin to be able to trade in anonymity. All they need to do is to choose the cryptocurrency that they want to use and let’s Incognito Wallet help to conduct totally private transactions.
Once turning on “Incognito mode”, the cryptocurrency for a transaction will be converted to a private coin, which is unable to be traced in the blockchain, at the rate 1:1. This privacy version will then be used in the transaction and the details of this process will be hidden to the third parties. It helps investors not to necessarily care whether the crypto is private or not and they can trade anonymously with any type of digital money that this wallet supports.
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