Definition ∞ Non-custodial anonymity refers to privacy-enhancing methods in digital assets where users retain full control of their funds while obscuring transaction details. This differs from custodial services where a third party manages assets. These systems typically employ cryptographic techniques like zero-knowledge proofs or coin mixing protocols to break transaction links. It offers users a higher degree of privacy without relinquishing asset control. Such anonymity enhances fungibility on public ledgers.
Context ∞ Non-custodial anonymity solutions are at the forefront of privacy discussions in the digital asset space, balancing user desire for privacy with regulatory demands for transparency. Debates often involve the legal and ethical implications of these tools, especially concerning anti-money laundering efforts. Advances in zero-knowledge cryptography continue to improve the effectiveness and decentralization of these privacy methods.
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