Cryptocurrency

• The public ledger. On Bitcoin, Ethereum, Litecoin and most other chains, every transaction shows the sending address, the receiving address and the amount. Analysts group addresses that are spent together and follow funds across many hops. Chain analysis firms sell this as risk scoring to exchanges and others.
• Exchanges and ID checks. Regulated exchanges verify your identity, and in the EU they must also collect information about the sender and recipient of crypto transfers (European Commission). A single verified withdrawal ties your name to an address.
• Network leaks. A wallet that connects to someone else's node reveals your IP address to it. On Monero, "spy nodes" pretend to be many separate nodes to guess which IP address first sent a transaction (Monero Research Lab).
• Habits. Reusing addresses, combining coins from different sources in one payment and paying round amounts all make tracing easier.

What privacy coins hide

Monero currently hides the coin you are spending among 16 candidates: the real one and 15 decoys taken from the blockchain. A planned upgrade called FCMP++ (full-chain membership proofs) would replace these rings so that each spend could be any of roughly 100 million outputs on the chain (Monero project). Litecoin's MWEB (MimbleWimble Extension Blocks) is a separate, optional layer: coins entering and leaving it are visible on the normal chain (LIP-0003).

Monero is the coin this guide recommends for private payments, because every user gets the same protection without having to opt in. Zcash offers strong cryptography but leaves privacy optional. Dash is included because it is often marketed as private; for most purposes it is not.

The 2025 selfish-mining episode

In August and September 2025 the Qubic mining pool used selfish mining against Monero: it withheld the blocks it found and later released them to replace blocks mined by others. This caused several chain reorganisations, the deepest of 18 blocks on 14 September 2025, and invalidated some transactions in the replaced blocks (research meeting log). Developers have discussed checkpoints, a finality layer and protocol changes against selfish mining, and research was still ongoing in October 2026 (meeting log). For large incoming payments, wait for more confirmations than usual before treating them as final.

A wallet holds the keys that control your coins. The wallets below are non-custodial: keys stay on your device, and the recovery phrase (seed) you write down when creating the wallet is the only backup. For privacy, also think about which server the wallet talks to. Running your own node is best; connecting over Tor is the next best option.

The official Monero wallets, a graphical (GUI) and a command-line version, are the reference implementation and support Ledger and Trezor devices (downloads). The options below are lighter or easier to use.

A hardware wallet keeps your keys on a small dedicated device and shows each payment on its own screen before signing it, so malware on your computer cannot quietly change the recipient. It is worth having once your holdings would hurt to lose. It does not make payments private on its own: pair it with a privacy-respecting wallet such as Feather or Sparrow.

Centralised exchanges are where your identity usually gets attached to your coins. The tools below let you trade directly with other people. There is no account or identity check, and no company holds your coins.

Atomic swaps

An atomic swap exchanges coins on two different blockchains so that either both sides receive their coins or both get them back. Nobody holds your funds in between. The trade-offs are lower liquidity, slower trades and a wait for the refund if a swap fails.

Peer-to-peer markets for cash, bank transfers and crypto

These networks match you with another person who pays or receives in fiat money or another coin. Escrow and security deposits protect the crypto side of the trade. The payment side depends on the other trader, and a bank transfer or payment app shows them your account name.

A centralised exchange holds your coins and knows who you are. Regulated exchanges verify identity, keep records and can freeze accounts. Privacy coins are increasingly hard to find on them: Binance delisted Monero in February 2024, and exchanges in South Korea and Australia have dropped privacy coins under regulatory pressure (Wikipedia). If you use an exchange, withdraw to your own wallet promptly.

Mixers pool coins from many users to break the link between what goes in and what comes out. This guide does not recommend them:

• They are easy to spot. Mixing and CoinJoin transactions have recognisable patterns, and chain analysis firms offer risk scoring for them (Dash documentation). Exchanges may question or freeze funds that passed through one.
• Developers and operators have been prosecuted. In the US, both Samourai Wallet developers pleaded guilty in July 2025 to conspiring to run an unlicensed money transmitting business (Yahoo Finance); Keonne Rodriguez was sentenced to five years in November 2025 (Yahoo News).
• Tornado Cash. Developer Roman Storm was convicted on the same charge in August 2025, while the jury could not agree on money laundering and sanctions charges (CoinDesk); in March 2026 prosecutors asked for a retrial on those charges (CoinDesk). In the Netherlands, developer Alexey Pertsev was sentenced to five years and four months in 2024 (The Record).
• Sanctions can change. The US Treasury sanctioned Tornado Cash in 2022, making its use illegal for US persons, and lifted the sanctions on 21 March 2025 (US Treasury).

Monero gives every user the same privacy without a separate mixing step, and atomic swaps let you move from Bitcoin to Monero without a custodian. On Bitcoin itself, coin control and Silent Payments (a reusable address whose incoming payments cannot be linked to it on the chain) reduce linking without a mixer.

Laws differ by country

• European Union. Exchanges and other crypto-asset service providers must already pass on sender and recipient details with transfers. The Anti-Money Laundering Regulation (EU) 2024/1624, which applies from July 2027, bars them from keeping anonymous accounts and from handling anonymity-enhancing coins such as Monero (European Commission). It regulates service providers, not people holding coins in their own wallets.
• United States. No federal law bans holding privacy coins. Running a mixing or exchange service for other people without a money transmitter licence has led to the criminal convictions above.
• Asia and Australia. Exchanges in Japan, South Korea and Australia have delisted privacy coins under regulatory pressure (Wikipedia: Monero, Wikipedia: Zcash).
• Elsewhere, check local rules on peer-to-peer trading and reporting. Tax on gains usually applies however private the coin is.

• Use a new address for every payment. Monero wallets create subaddresses for this, and Bitcoin wallets generate fresh addresses automatically; do not hand out an old one again.
• Keep savings on a hardware wallet bought directly from the manufacturer, and only spending money in a phone wallet.
• Run your own node or connect over Tor. A remote node learns your IP address and which transactions your wallet is interested in. If you run a Monero node, consider enabling the spy-node ban list.
• Avoid centralised exchanges where you can. Prefer atomic swaps and peer-to-peer markets, and move coins off any exchange you do use.
• Do not merge coins with different histories. On Bitcoin, coins spent together are assumed to belong to the same person. Use coin control to choose what you spend.
• Keep your crypto identity separate. Use a dedicated email address, pay for hardware with crypto or a virtual card, and ship to a pick-up point where possible. See also separate identities.
• Hide your network location with Tor or a trustworthy VPN when you visit exchanges, swap sites and block explorers.
• Say little about your holdings. Public talk about crypto wealth attracts targeted scams and theft.

• Sharing your recovery phrase. Anyone who has it controls your coins. No wallet maker, support agent or exchange will ever ask for it; the phishing emails sent through Trezor's hijacked newsletter account in September 2026 did exactly that.
• Installing fake wallets. Download wallets only from the official site or repository, and check the published signatures or hashes where offered (Monero downloads).
• Keeping a single, digital backup. Write the recovery phrase on paper or metal, store copies in more than one safe place, and never keep it as a photo or in cloud notes.
• Not checking the address. Transactions cannot be reversed, and clipboard malware swaps copied addresses. Compare the address on the hardware wallet screen before you confirm.
• Using a pre-configured device. A hardware wallet that arrives with a recovery phrase already set, or in an opened package, should not be used.
• Assuming a coin is private because it is marketed that way. Dash, Litecoin outside MWEB and transparent Zcash addresses are as traceable as Bitcoin.
• Skipping a test payment. Send a small amount first when you try a new wallet, swap service or trading partner.

• Monero project: full-chain membership proofs (FCMP++)getmonero.orgWhy rings are being replaced and how the anonymity set grows.
• Monero Research Lab: ban spy node IP addressesgithub.comWhat spy nodes do and how node operators can block them.
• Haveno: trade protocoldocs.haveno.exchangeHow 2-of-3 multisig escrow and security deposits work in peer-to-peer Monero trades.
• LIP-0003: MimbleWimble Extension Blocksgithub.comThe Litecoin specification, including what stays visible when coins enter and leave MWEB.
• ZODL: Ironwood, a new shielded pool for Zcashzodl.comWhy Zcash moved shielded funds to a new pool after the 2026 Orchard bug.