Extension anonymizes bitcoin transactions

Zerocash lets users make completely anonymous digital currency transactions amid money laundering concerns.

Bitcoin, the digital currency sent via direct transactions without the need for banks, continues to grow on global exchange markets. However, security issues have always been a concern, with naked digital addresses making it possible to trace user transactions. A new cryptocurrency extension Zerocash is aiming to completely anonymize online currency transactions.

Developed by cryptographers at John Hopkins, MIT and Tel Aviv University, Zerocash (previously known as Zerocoin) was developed as an extension of the existing Bitcoin code, to bring privacy in the same manner HTTPS websites provide secure connections. Bitcoin transactions are publicly available and users’ IPs can be traced. While some claim this encourages honest transactions, Zerocash argues that though governments can monitor money trails, most people wouldn’t want their neighbors or employers to know their bank statement history. However, crypto extensions that make bitcoin and other digital currency exchange completely anonymous raises concerns about illegal activity. But Zerocash argues that the benefits to legitimate users who do not want their financial details made public outweigh the criminal element.

What other transaction tools can help strike a balance between privacy and security?