Let’s start with why major cryptocurrencies like Bitcoin and Ethereum are not privacy coins. These coins do not provide anonymity, but pseudo-anonymity. Pseudo-anonymity in this case means that users do not make payments anonymously, but under a “false” name.
One of the larger pirvacy coins. Transactions with it are always anonymous with no additional actions required.
Anonymous coin where the user can choose whether the sender and receiver information should be additionally encrypted. Zcash is a centrally controlled coin where the developers have a lot of power. They might consider working with central governments.
Dash (short for Digital Cash) is a crypto currency formerly known as Darkcoin or XCoin. This coin does require the user to first turn on the feature for completely anonymous transactions
With Bitcoin and Ethereum, you also own such a “fake name” and you make transactions under this name. In fact, you can own an infinite number of such fake names. However, this does not mean that you are anonymous. Everything you do under this pseudonym is fully transparent on the blockchain.
Privacy coins ensure that, everything you do with your cryptocurrencies is actually hidden from the rest of the world.
You don’t necessarily need to understand what all this means. What you do want to remember is that these technologies, each in their own way, provide complete anonymity. But why is anonymity so important in the first place?