“Coins with optional privacy can be tracked, says Dave Jevans, the CEO of the blockchain detective firm CipherTrace, but those where “privacy features are on by default” are “much more difficult.” For anyone that can crack the code and trace these coins, the bounty is expected to be high. Desperate to find a cure, the U.S. Department of Homeland Security has already published a pre-solicitation document calling for technology that can follow the trails left by privacy coins like Monero and Zcash.
But even as the authorities whack down the mallet, the mole is sure to pop up in another hole. And the next generation of privacy coins — built on a protocol named “Mimblewimble” after the “tongue-tying curse” in the Harry Potter books — are already promising faster transactions, even higher levels of privacy, and immunity from the scaling problems that have slowed down bitcoin’s progress.”