Using bitcoin for anonymous transactions isn’t easy. This article aims to answer the burning question: How to keep my bitcoin transaction untraceable?
It’s an established fact that a person’s identity could potentially be exposed by their Bitcoin transactions. The fact that Bitcoin is not really anonymous is becoming more of an issue, so what can we do to stay untraceable?
IS BITCOIN TRACEABLE AND TOTALLY ANONYMOUS?
When Bitcoin burst onto the scene in 2009 and for a few years after, it was perceived by many as a completely private and untraceable form of payment, unable to be tracked or followed by any outside entity. As cryptocurrency grew in popularity and people’s understanding of it began to develop, it became clear that this was not in fact the case.
Put simply, Bitcoin doesn’t offer as much anonymity as some might have you believe. Many people automatically assume that Bitcoin is completely anonymous and aren’t worried about using it as a form of payment for goods and services online. Unfortunately, these people are mistaken and leaving themselves wide open from a security perspective. Contrary to popular belief, Bitcoin is actually pseudonymous rather than anonymous, meaning that while your identity is not listed directly, there are publically available details that can lead to it being revealed. Even something as simple as your IP address can be used to do just that.
The problem starts when your personal information is required by intermediary companies, such as Coinbase. They ask you to provide data in order to comply with KYC and anti-money laundering laws. Essentially, this means that companies that offer services such as currency exchange are big targets for hackers who want to get at that information. In the event this happens, your Bitcoin could potentially be stolen or your personal information sold or leaked to a third-party.
When all is said and done, holding and transacting Bitcoin is not all doom and gloom, as it does actually offer a certain level of protection in many ways. For example, using it directly doesn’t require the use of personal data, which makes it completely safe in that regard. Just take care when you use it on services such as the aforementioned Coinbase.
HOW ARE TRANSACTIONS RECORDED?
Over the last few years, Bitcoin has become one of the most commonly used forms of currency when it comes to making anonymous transactions online. After all, online privacy is something that many people are becoming increasingly concerned about. In another word, the question ‘How to keep my bitcoin transaction untraceable’ is considered as one of the biggest issue of the crypto world in 2020.
Unfortunately, all bitcoin transactions are public, traceable, and permanently recorded in the bitcoin network associated with the transacting bitcoin address. Bitcoin addresses are created privately by each user and are the only information publicly associated with transactions. Once an address is used, the entire history of its associated transactions becomes visible as well.
Anyone can view the transaction history of an address. Since the address has to be revealed to complete a transaction, full anonymity is not often possible and sending bitcoin anonymously is not easy either. Oftentimes transactions are instead pseudonymous, meaning that people’s real identities are obscured to the public while their wallet address is visible. Pseudonymous systems fall apart however if the wallet owners’ real identity becomes known, as now there is a name to the asset balance and fraudsters have all the ammo they need to strike.
Are there any ways to increase the security and anonymity of our bitcoins? How to stop people from seeing what I do with my bitcoin?
HOW TO KEEP MY BITCOIN TRANSACTION UNTRACEABLE AND MORE PRIVATE?
By taking the necessary precautions, it is possible to safely use Bitcoin as an online payment method without having to worry about your privacy being breached. To put things into perspective, it would be a good idea to apply the same level of security to your Bitcoin wallet as you do to your bank account. By doing just that, you can rest assured that you’ll have done pretty much everything in your power to keep your personal information well away from any prying eyes.
For the reasons covered in the previous section, it is important to remember that you should always adopt good practices in order to avert a potential disaster. In other words, you shouldn’t just automatically come to the conclusion that using Bitcoin alone is enough to protect you when paying for goods and services or trading currency online.
Making use of internet security or antivirus software as another form of online protection is also recommended. This will allow you to prevent your system from being infected by various forms of malware, viruses, ransomware or even a crypto-jacker, which surreptitiously uses your system to illegally mine cryptocurrency.
Despite bitcoin not being completely anonymous or untraceable, there are strategies you can employ to veil your identity from the public.
MAKING BITCOIN MORE PRIVATE AND UNTRACEABLE
For those wanting to keep their activity private, it is recommended that you use a new bitcoin address every time you make a transaction. This will make it essentially impossible for outsiders to link any of your transactions back to you as there will not be a common address. You can also use several different wallets and assign each one a different purpose, thus isolating your transactions and making them more difficult to associate with one another.
You shouldn’t share your address or wallet information publicly unless it is for something like donations. Even then, you must be prepared for your information to be publicly known because once someone links that address to you, they’ll know your full transaction history.
These are a few of the ways to protect your identity when dealing in bitcoin, but there are also certain forms of cryptocurrency known as privacy coins that aim to further obscure a user’s identity.
Bitcoin users should be able to operate without worrying about spies who can analyze the public blockchain and use IP addresses to ascertain the true identity of wallet holders.
Thankfully, there is a lot of technological development happening that should make Bitcoin more private and this is due to the demand to send bitcoin anonymously. Privacy-enhancing innovators like Incognito, for example, certainly offer a solution, through the creation a privacy token version of Bitcoin. In any case, if you’ve read this far, you should now know that the question ‘how to keep my bitcoin transaction untraceable?’ certainly has an answer.
To summarize, by following the tips that we mentioned earlier, you should now be aware of exactly what it takes to protect yourself when browsing the web and using payment methods such as Bitcoin. We hope this guide helped you understand how to send bitcoin anonymously.
See you at the next tutorial!