Not so private: 99% of Zcash and Dash transactions are traceable, says Chainalysis

Chainalysis claims it can track 99% of transactions involving Zcash and nearly all of Dash’s coins which they both imagine are private and untraceable.

Now, this is because most users are not using the optional privacy enhancement features available on the two blockchains, he said in a blog on June 8, announcing support for the two cryptocurrencies.

By tracking coins for privacy – digital assets whose primary purpose is to hide financial transactions from unwanted attention – Chainalysis has made it easy for law enforcement to do the same.

“Dash and Zcash allow users to conduct transactions with greater privacy, but that doesn’t mean they provide total anonymity,” said the US-based crypto analytics company.

For example, only 0.9% of transactions processed on the Zcash network (ZEC) allow for maximum privacy, even with strong encryption.

“… even though obfuscation on Zcash is stronger thanks to zk-SNARK encryption, Chainalysis can still provide the transaction value and at least one address for over 99% of the Zec business,” the company said.

On Dash, Chainalysis is more ruthless. He says calling cryptocurrency “a privacy coin is a misnomer”.

The percentage of Dash transactions that constitute actual transfers of funds using Privatesend, the asset’s privacy feature, is less than 0.7%, the company found.

“… from a technical standpoint, Dash’s privacy functionality is no greater than that of Bitcoin … In fact, the independent wallet software provides more advanced forms of Coinjoin that are used with major unlabeled cryptocurrencies. like privacy coins, like bitcoin, bitcoin cash and litecoin, “he says.

This isn’t the first time privacy coins have been exposed. Carnegie Mellon University researchers found that 99.9% of Zcash and 30% of Monero – another so-called privacy coin – were traceable.

Furthermore, most of the use of Dash and Zcash is already for non-privacy purposes. According to Rand Corporation studies, of the cryptocurrency addresses mentioned on the dark web, less than 0.2% were for either of the two virtual currencies.

Dash and Zcash account for approximately $ 1.5 billion of reported daily trading volume. Dash is down 0.36% to $ 77.78 in the past 24 hours and Zcash is down 0.68% to $ 52.10, according to data from markets.bitcoin.com.

What do you think about the fact that privacy coins are not private? Let us know in the comments section below.

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