Contrary to what was initially believed by many people, digital currencies such as Bitcoin do not actually provide privacy. The whole point of a public ledger is that all transactions should be available to anyone with an internet connection and a software client such as a cryptocurrency wallet or a web browser. As a matter of fact, in certain applications this transparency is the entire point of blockchain technologies; it is an inherent feature.
But some applications still provide some privacy for users. The two most popular are Zcash and Monero. Zcash is a privacy-focused cryptocurrency with a focus on fungibility, which means that people can pay one another with Zcash and the coins themselves are guaranteed to be the same as others in the same “supply.”
However, in order to achieve this, Zcash sacrifices some of its “whitelisted” anonymity by requiring users to have their wallet clients connected to the public blockchain network. As of January 2020, Zcash is the second-most-valuable cryptocurrency in the world.
Monero is a privacy coin that utilizes ring signatures, an obscure cryptographic method that is very difficult to reverse engineer. In terms of anonymity, however, it doesn’t offer the same anonymity as Zcash, at least not by default, but it does provide its users with the option to choose how much anonymity to provide.
There is also the Panther protocol and its zero-knowledge principle that can be applied to multiple blockchain networks for the purpose of achieving privacy, secrecy, and even plausible deniability. As its name indicates, the zero-knowledge Panther protocol is a form of cryptography that provides the holder of a secret with the assurance that the information will not be revealed even if the rest of the world has knowledge of the secret. In this context, however, it is applied to blockchains and cryptocurrencies.
Let’s take the example of a secret, namely that of a wallet address. In this case, the secret is the address itself and we know this address belongs to a wallet. But, we still don’t know anything about the owner of this wallet because all the information related to the owner are only hidden. Such is the essence of the Panther protocol.