What characterizes 'private' cryptocurrencies?

Private cryptocurrencies are characterized by the fact that they are not issued or regulated by any government's central bank. This independence from governmental control allows these cryptocurrencies to function in a decentralized manner, often relying on a network of users for validation and transaction processing.

Since private cryptocurrencies typically aim to provide anonymity and privacy for their users, they tend to be preferred for transactions that users want to keep away from institutional scrutiny. This also means they can often operate outside of traditional financial systems, which further enhances their appeal among certain segments of users looking for an alternative to government-backed currencies.

The distinction from central bank-issued currencies is crucial here, as it highlights the core philosophy behind many private cryptocurrencies which emphasize decentralization, autonomy, and the potential for privacy in financial transactions.