On June 8, Chainalysis announced that it will include the Zash (ZEC) and Dash (DASH) privacy coins making it easier for authorities to track them.
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Calling Dash a privacy coin is giving him an inappropriate name
The company claims that it can track most of Zcash and Dash’s transactions, due to the fact that many of its users do not use privacy-enhancing features. When it comes to Dash, Chainalysis goes so far as to say that giving him the name „privacy currency“ is inappropriate, it concludes:
„In fact, stand-alone wallet software provides more advanced forms of CoinJoin that are used with major crypto currencies that are not labeled as privacy coins, such as Bitcoin, Bitcoin Cash, and Litecoin.
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Dash is happy with Chainalysis‘ support
In a statement to Cointelegraph, Dash Core Group CEO Ryan Taylor said
„Dash offers users the option of enhanced privacy transactions, because user security is important to the widespread adoption of crypto currencies, and there it is for end users who value that functionality, at the same time, Chainalysis is a leading provider of advanced AML and blockchain analysis that is necessary for Bitcoin Circuit services businesses that need to balance privacy needs with compliance needs, ultimately both promote the secure use of cryptomonies while ensuring access to legacy financial markets, so I am pleased that Chainalysis has chosen to implement Dash on its platform.
This level of satisfaction on the part of the CEO of an organization that sells privacy to its users is somewhat disconcerting; it is understandable that increased compliance may accelerate the adoption of cryptomoney; however, this provision may alienate many users.
Privacy coins face an uncomfortable dilemma that in simplified terms would be: comply or die by government smothering, for example, several exchanges have recently removed Monero from their lists, it is understandable that governments around the world want to have greater transparency in cryptomonies, which can be used for illicit purposes, at the same time, with the increasing reach of governments, some people feel a greater need for tools to improve privacy.
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Now, at least, Dash doesn’t look like one of those tools, similarly, Zcash uses zk-SNARKs, which in theory should allow maximum privacy for users, according to Chainalysis, only 0.9% of their transactions are fully protected:
„So, even though the redirection in Zcash is stronger due to the encryption with zk-SNARKs, Chainalysis can still provide the transaction value and at least one address for over 99% of ZEC transactions.“
Zcash rejected Cointelegraph’s request for comments.
Recently, Carnegie Mellon University researchers concluded that 99.9% of Zcash transactions and 30% of Monero(XMR) transactions were traceable.