For all of you who have been following the Zcash news and thinking that ZEC comes with privacy features and untraceable transactions, prepare to be surprised. According to Chainalysis, almost all Zcash and Dash transactions (99% of them) can be traced, even though the coins market themselves as private and untraceable.
Now, this is because the majority of users do not utilize the optional privacy-enhancing features that are available on the two blockchains. As the cryptocurrency research company said in a June 8 blog post when it announced support for Zcash and Dash, these coins can actually be tracked.
By doing that, digital assets whose primary purpose is to hide the financial and unwanted attention are now risking a reputation drop. Chainlysis has made it easy for law enforcement agencies to do the same. The cryptocurrency analytics company noted:
“Dash and Zcash allow users to conduct transactions with greater privacy, but that doesn’t mean they provide total anonymity. Even though the obfuscation on Zcash is stronger due to the zk-SNARK encryption, Chainalysis can still provide the transaction value and at least one address for over 99% of Zec activity.”
When it comes to the Dash news, Chainalysis is even more ruthless. It said that almost all Zcash and Dash transactions can be traced, but the Dash ones come with a privacy feature which is less than 0.7%.
“From a technical standpoint, Dash’s privacy functionality is no greater than Bitcoin’s…In fact, independent wallet software provides more advanced forms of Coinjoin that are being used with major cryptocurrencies not labeled as privacy coins, such as bitcoin, bitcoin cash, and litecoin,” Chainalysis noted in its Dash findings.
Obviously, this is not the first time privacy coins have been debunked. In previous cases, we saw researchers from Carnegie Mellon University with their findings that 99.9% of all Zcash and 30% of Monero transactions were actually traceable.
As we can see, almost all Zcash and Dash transactions can be traced by everyone. However, the majority of their usage is already for non-privacy purposes. As one study found, less than 0.2% of the addresses on the networks were for either of the two digital assets.
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All in all, Dash and Zcash account for around $1.5 billion of reported daily trading volume. Both of the coins experienced a slight decline in the cryptonews today.
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