What is Privacy Worth at PIVX?

The PIVX (PIVX) is a cryptocurrency whose creators ask “what is privacy worth?”

To explain, privacy is the primary goal of PIVX. The PIVX team claims to take privacy to the next level with a twist on Zerocoin Protocol.

To clarify, the Zerocoin Protocol extends the Bitcoin protocol; Johns Hopkins University Professor Matthew D. Green and his graduate students, proposed in 2013. In detail, Zerocoin deposits funds in an escrow pool that automatically erases records as they make each transaction. Plus, Zerocoin uses an advanced mathematical formula they call zero-knowledge truths to verify transactions.

How PIVX plans to increase privacy

The PIVX developers claim their altcoin enables untraceable transactions through a decentralized blockchain. Additionally, PIVX claims this creates a private proof-of-stake.  To elaborate a private proof-of-stake is a onetime transaction only specific parties can see.

Moreover, PIVX claims these features enable a global private network only its users can see. There is also a Private Identity you can use to create a PIVX wallet on any computer or mobile device.

Other PIVX features include Private Rewards Points; a Private Send and Spend feature which supposedly enables anonymous transactions, and a Private Exchange they call zDex. Moreover, PIVX’s creators claim their cryptocurrency works with popular hardware wallets like the Trezor and the Ledger Nano S.

PIVX has ambitious plans

Interestingly, PIVX is developing a network of PIVX Ambassadors. To explain, the ambassadors are superfans who spend their time promoting PIVX.

Moreover, PIVX will try to bring democracy to the blockchain by offering a functioning off-chain PIVX voting site where members will decide about the protocol. According to PIVX’s website, they will call this site TANGO (ALPHA).

Other ambitious plans at PIVX include an Incubator with a business development team to implement money making strategies, an Alliance Payments Protocol, and an e-commerce initiative they call Vendible.

How Secure and Private is PIVX?

Unfortunately, I cannot tell how private and secure PIVX is. Like a lot of cryptocurrency developers the PIVX team operate on a “trust us we know what we’re doing philosophy.”

Theoretically, PIVX’s features could offer a high level of privacy. However, I do not believe PIVX has the resources to keep sophisticated hackers from cracking its network.

In particular, I doubt any of PIVX’s privacy features could resist attacks from major intelligence agencies. Such organizations include America’s National Security Agency (NSA) or Great Britain’s GCHQ (Government Communications Headquarters). Since GCHQ has been cracking codes and encryption for over 100 years, it could easily penetrate PIVX.

Why Governments will Penetrate PIVX

Moreover, I think Her Majesty’s Government will have a strong incentive to sic GCHQ on privacy cryptocurrencies like PIVX if somebody uses them for tax evasion. Given human nature, I think it is only a matter of time before major tax evaders abuse privacy coins like PIVX and pEOS (PEOS).

In addition, bad guys like terrorists, gangsters, smugglers, and pornographers will use privacy coins at some point. Consequently,that will force authorities to crack privacy coins. Thus, I believe it is only a matter of time before authorities penetrate all privacy coins.

Notably, the GCHQ lists; “reducing the social and financial harm that serious and organised crime causes to the UK” as one of its primary missions.” Under those circumstances, I believe GCHQ is already hard at work cracking all privacy coins.

Why Speculators should Avoid Privacy Coins

Consequently, privacy coins like PIVX could present speculators with a perfect opportunity for shorting.

To explain, I think all it will take is one news story about authorities tracing and arresting some bad guy through a privacy coin to destroy their value. Note, GCHQ and the NSA’s operations are supposedly secret, but all secrets leak out, eventually. For instance, America’s atomic bomb was supposedly “secret” during World War II, yet Joseph Stalin knew all about it long before Hiroshima.

My prediction is that the value of coins like PVIX will collapse when somebody disproves their claims of privacy.

Will Governments ban coins like PVIX?

Moreover, I doubt privacy coins like PVIX (PVIX) will achieve wide use because of legal concerns.

To explain, no legitimate business will touch these altcoins because they could violate Anti Money Laundering (AML) and Know Your Customer (KYC) regulations. Consequently, any financial institution or business that accepts something like PVIX could face legal actions. Such legal action could include loss of licenses, seizure, or even prison time for executives.

In fact, I believe many businesses and financial institutions will set up protocols or algorithms to detect privacy coins and keep them out. Therefore, I do not see what value coins like PVIX can have.

What Value does Privacy have at PVIX

However, PVIX’s technology could have some value if claims like fast transaction processing, rewards points, and low cost transactions are true. To clarify, I think big companies or companies could pay for those solutions if they are real.

Notably, PIVX claims it could process a transaction for as little as 1₵. In addition, PVIX claims it can process transactions in as little as 60 seconds. In contrast, it takes Stripe two to three business days to deposit my Medium royalty money in my bank account.

A more valuable solution could be the three kinds of rewards points PVIX claims to offer. Notably, rewards points are already big business. For example, credit card giants like Visa (NYSE: V), Starbucks (NASDAQ: SBUX), and retail giants like Kroger (NYSE: KR) use rewards points to drive business.

How Much is PVIX Worth?

However, Mr. Market thinks PVIX has some potential. In fact, Coinmarketcap estimates PVIX had a Coin Price of 70.1₵, a 24-Hour Market Volume of $3.974 million, and a Market Capitalization of $35.805 million on 24 May 2019. Coinmarketcap bases those figures on a Circulating Supply of 56.781 million PIVX.

Moreover, PVIX’s attributes as a cryptocurrency are dubious. In particular, PVIX is not convertible to Ethereum (ETH) the most widely used blockchain. In addition, PVIX has no total supply; hence they can mint unlimited amounts of PIVX. Consequently, inflation could make PVIX worthless by shrinking its Coin Price to a pittance.

In the final analysis, I think PVIX (PVIX) is too risky for anything but shorting. Therefore, I advise all investors and speculators to stay away from PVIX.