Privacy Coins and Their Use in Online Gambling

As data privacy and security become essential, anonymity-based digital currencies, or so-called “privacy coins,” are rising, especially in online gambling. 

However, for those users who consider privacy necessary, coins such as Monero (XMR) can solve this problem because transactions made with such a currency are almost untraceable. 

Research indicates that about 19% of internet gamblers now use privacy coins to enhance their anonymity. But first, let’s break down exactly what privacy coins are and how they can improve privacy for online gambling.

This article looks at privacy coins, their advantages and disadvantages, their mechanics, and the top options for anonymity-seeking players.

Understanding Privacy Coins: What Are They?

Privacy coins are digital currencies developed to maintain customer data security and make transactions even more untraceable. 

Unlike traditional cryptocurrencies like Bitcoin, which store all transaction information in the public ledger, privacy coins employ complex cryptographic tools to hide the details of both the sender and the recipient and the amount in the transaction.

Key Privacy Features in Privacy Coins

• Obfuscated Transactions

Privacy coins employ features such as RingCT ( Ring Confidential Transactions), which obscure transaction information, making it difficult to trace the funds.

• Stealth Addresses

Every transaction results in a new address, and tracking several transactions for a single user is difficult.

• Privacy-Centric Protocols

Privacy coins use certain features, such as ZKPs or MW, that add anonymity to the process.

After researching the best privacy coins for online gambling, the following are the best choices.

Now, let’s look at the most frequently used privacy coins in online gambling and their peculiarities.

1. Monero (XMR)

Monero is the most famous privacy coin. It is known for its high level of security and, especially, its feature that allows transactions to remain anonymous. The privacy of Monero transactions is enhanced by the use of Ring Signatures, Stealth Addresses, and Ring Confidential Transactions.

Pros:

• Highly Secure and Private: The current Monero protocol ensures that people cannot track the transactions back to the owners of the money.

• Wide Acceptance: Privacy coins are widely accepted in many online casinos, and Monero is one of them.

• Scalability: Monero’s blockchain allows for a high throughput of transactions without affecting its level of security.

Cons:

• Lower Transaction Speed: Monero’s transactions are slower than those of some other coins.

• Limited Accessibility: At least some of the exchanges don’t accept Monero because of its anonymity.

2. Zcash (ZEC)

Zcash has a different privacy concept. It gives users the option of having a transparent or shielded transaction, depending on their privacy preferences.

Pros:

• Optional Privacy: The shielded transaction feature of Zcash is untraceable because the zero-knowledge proof protocol is called zk-SNARKs.

• Transparent and Private Transactions: Every transaction has the option to be published to the Blockchain or not.

• Fast Transactions: Zcash is quick; the faster the transaction is processed, the better for gambling.

Cons:

• Limited Privacy: Since privacy is an option, not all transactions are anonymous, which may limit the casino’s popularity in privacy-oriented casinos.

• Lower Casino Support: Significantly fewer websites accept Zcash than Monero.

3. Dash

Dash was originally created for fast, cheap payments, but it added a privacy layer that might attract privacy-concerned gamblers. Its PrivateSend feature combines coins from different transactions, so they can’t be traced back to the user.

Pros:

• Speed and Efficiency: Dash's instantSend technology makes transactions nearly instant.

• Low Transaction Fees: Dash provides affordable transaction charges that are available for individuals who regularly gamble.

• Optional Privacy with PrivateSend: PrivateSend helps users make transactions anonymous.

Cons:

• Not Completely Private: Dash’s privacy is an opt-in and probably not as safe as Monero or Zcash for people who want to be as hidden as possible.

• Lower Privacy Adoption: Dash is not a ‘pure’ privacy coin; fewer privacy-based casinos should accept it.

4. Verge (XVG)

Verge is another cryptocurrency that emphasizes privacy. It uses the Tor network and I2P to hide IP addresses.

Pros:

• Focus on Privacy: The integration of Tor and I2P gives Verge a very high level of anonymity since the users’ IP addresses are hidden.

• Affordable and Fast: Verge is cheap, and the time it takes to execute transactions is short.

• Community-Driven: Verge is a decentralized platform based on open source with a community focus on privacy so that it can be easily customized.

Cons:

• Lower Privacy Compared to Monero: Although Verge offers some level of anonymity, it is not comparable to the level of anonymity Monero offers.

• Lower Casino Acceptance: Only a few online casinos accept Verge because it is unpopular.

Benefits of Using Privacy Coins in Online Gambling

Privacy coins offer several advantages that make them well-suited for online gambling:

Enhanced Anonymity

Privacy coins enable players to gamble anonymously without the casino or any other third party knowing the player’s identity.

Security from Tracking

Privacy coins make it difficult to track transactions due to the blurring of transactional information, which makes it difficult for hackers or any other lousy person to penetrate.

Reduced Identity Theft Risk

Players avoid identity theft because no identification data is associated with the transactions.

Avoiding Geographical Restrictions

Thanks to privacy coins, players in places where gambling is prohibited can gamble anonymously, but it is always important to be careful with the laws in your country.

Essential Security Tips for Using Privacy Coins in Gambling

Using privacy coins can add an extra layer of security, but it’s crucial to follow these best practices to ensure a safe gambling experience:

1. Choose Reputable Casinos That Accept Privacy Coins

Select online casinos that are licensed and reputable and that support privacy coins. Ensure that the casino encrypts all its connections using SSL and that the privacy terms are well stated.

2. Use a Secure Wallet

If you are keeping privacy coins, use a secure wallet. Some of the best options include a hardware wallet like Ledger or Trezor. Allow 2FA and try to use a wallet that you do not link with your primary financial accounts.

3. Enable Privacy Features Fully

Zcash and other privacy coins require privacy on every transaction, so users can turn on or off the privacy option. To increase privacy even more, use such instruments as Tor or VPNs, especially if you store assets in a wallet that tracks IP addresses.

4. Regularly Monitor Your Transactions

Check your transaction history often to ensure no unauthorized transactions are being made. Refrain from re-using addresses where possible since this increases your chances of being associated with transactions.

Possible Threats and Challenges of Privacy Coins in Betting

While privacy coins offer significant advantages, there are some risks and limitations to consider:

Limited Casino Support

However, only some online casinos accept privacy coins, which might pose a problem to players who want particular games or bonus offers.

Regulatory Risks

Certain regulators are now beginning to target privacy coins because of their anonymity. Future legislation could impact their accessibility and acceptance in the markets.

Transaction Speed

While Monero and other privacy coins are more anonymous than traditional cryptos, they could take longer to process transactions, such as deposits or withdrawals.

Conclusion

Privacy coins can be very useful for online gamblers who are concerned with anonymity and data security. 

Explaining each cryptocurrency, Monero, Zcash, Dash, and Verge, it can be seen that each has features that may be beneficial for improving the privacy of online gambling. 

Nevertheless, players should know that the adoption is still low when it comes to acceptance among casinos and may also lead to some regulatory problems.

In the future, privacy coins will be a potent force in the online gambling and cryptocurrency world, offering players safe and private transactions. 

To learn more about the secure practices of cryptocurrencies, please refer to the Coin Center’s Resource Page on Privacy Coins.