Today I’ll explain how to stop people from seeing what I do with my bitcoin, through my years of experience. Then I’ll show you how to send bitcoin anonymously.
BITCOIN ’S ANONYMITY
On a daily basis, whenever you spend money using traditional payment methods such as a debit card or bank transfer, your identity will be revealed without you even noticing.
This is because the financial institution you are registered with has all of your personal information. It’s not only with spending money either; every time you send or receive funds electronically, the bank knows how much you are sending and who you are sending it too.
Thankfully, Bitcoin is different. Instead of revealing your real-world identity when you send or receive funds, you transact on a peer-to-peer basis using just a Bitcoin address. This means that no third parties are required and there’s no link to your actual identity. Is bitcoin actually anonymous, though? If not, how to stop people from seeing what I do with my bitcoin?
1. Is bitcoin transaction really anonymous?
No, it isn’t. As we all know, all the transactions on the Bitcoin network are stored on a distributed ledger, which is publically available throughout the world. The issue here is twofold. Firstly, anyone can view a public address and check the number of Bitcoins associated with it. Secondly, a user’s identity can be found by tracking the IP address that was used to perform the transactions on the blockchain.
Despite its reputation, Bitcoin is not completely anonymous; With every transaction publicly disclosed on the Blockchain and identity verifications required by exchanges, it’s easy to see how your Bitcoin can be traced back to you.
2. Can Bitcoin transactions be traced?
Of course. As every transaction uses Bitcoin from a prior transaction, and the blockchain is public data, every Bitcoin payment has a traceable history that can be viewed by anyone.
While addresses are 100% traceable, they aren’t directly linked to any person or entity. As a result, Bitcoin is often called pseudonymous or pseudo-anonymous.
The most important thing to remember when attempting to remain anonymous is to not reveal your identity when you first buy Bitcoin. This is because every transaction that takes place on the Bitcoin blockchain can be viewed by anyone, so your transactions can be traced back to your original address. Although Bitcoin is now becoming more familiar with crypto users, but the question “how to stop people from seeing what I do with my bitcoin” is still unsold.
3. Why do we need to buy and send bitcoin anonymously?
The main reason is that you don’t want to get hacked or become a potential target. Raising your privacy level will simply lower the risk of these things happening.
Bitcoin’s Blockchain is built on rock-solid cryptography which prevents counterfeiting and other types of fraud, but the human element in its transactions is certainly the “weakest link.”
Many people are looking to buy Bitcoin anonymously but hate giving their photo ID to different Bitcoin exchanges. In the next section of this guide, we’ll look at the question that many people are asking: “How do I stop people from seeing what I’m doing with my bitcoin?” and then we’ll look at how to send bitcoin anonymously.
HOW DO I STOP PEOPLE FROM SEEING WHAT I DO WITH MY BITCOIN?
Here are some identity-hiding tips you can use that are considered to be some of the safest, easiest and fastest methods to send bitcoin anonymously
1. Method 1 – LocalBitcoins: A convenient way to buy and send bitcoin anonymously
The first anonymous Bitcoin exchange to examine is ‘LocalBitcoins’. Should it be actually helpful on looking for the answer of this hard question “how to stop people from seeing what I do with my bitcoin?”. Let’s have your eyes on this research for further information.
LocalBitcoins has on-the-ground buyers and sellers in nearly 13000 cities around the world. You can meet up with someone and pay cash directly, send them money through PayPal, Skrill or Dwolla or arrange to deposit cash at their bank branch.
LocalBitcoins allows the user to buy Bitcoins without verification and also supports a wide variety of payment methods. The site is easy to work with and also upholds its users’ privacy and security.
However, buyers need to be aware of transaction fees, as sellers are in complete control and can set whatever price they want. You should also be careful if trading face-to-face using cash, as you never know what might happen.
2. Method 2- Incognito: an excellent answer for the question “how to stop people from seeing what I do with my bitcoin?”
Incognito and their team are looking to redefine privacy. They are one of the best services out there that allow you to buy cryptocurrency without verification.
Incognito’s privacy sidechain can be attached to any Blockchain to conduct confidential asset transfers. The Incognito sidechain runs parallel to main Blockchains, allowing for secure two-way transfers of crypto assets whenever privacy is needed.
The Incognito network maintains the ledger and records all the transactions for transparency purposes, but to ensure privacy, every transfer using privacy tokens will not have an amount, sender or receiver that can be tracked. In the other word, Incognito mode is helpful to obscure sender crypto transaction. This is accomplished by using a sophisticated system built on zero-knowledge proofs.
The Incognito wallet is available on iOS, Android and as a Chrome extension. Users are in control, as they hold their own keys and sign all transactions locally. The aforementioned zero-knowledge proof system implemented on the client-side gives users a fast, secure, privacy-first experience. Users can also run a virtual or hardware node to earn block rewards and they can even issue their own privacy coins.
Incognito allows users to store, buy and send bitcoin anonymously. No one can view your balances or track your activity. By turning all your coins into privacy versions, you get the absolute best-in-class privacy solution and an unbeatable crypto wallet with a private key.
If you’re looking to send bitcoin without anyone knowing, then this is the easiest way. Incognito is the answer to the question “how to stop people from seeing what I do with my bitcoin?”
3. Method 3 – Bitcoin ATMs: another good option for sending bitcoin anonymously
Did you know that just like real-world ATMs, there are also Bitcoin ones too? However, rather than entering your card and withdrawing cash, you enter your cash and receive Bitcoin!
As Bitcoin is a digital currency, you don’t withdraw any physical coins. Instead, you supply the machine with your Bitcoin wallet address, and it transfers the funds across to you.
If you don’t have a Bitcoin wallet address already, the Bitcoin ATM can create one for you. Alternatively, if you specify that you don’t have one, the ATM will just generate a new paper wallet for you and you’re good to go. Later on, you can import the private key from that paper wallet and send the Bitcoin wherever you like.
Not all Bitcoin ATMs allow you to send bitcoin anonymously though, as some require you to scan your ID before use. However, by visiting the Coinatmradar website, you can narrow your search to only include machines that let you send bitcoin anonymously.
One of the disadvantages of using a Bitcoin ATM is that the fees are high. You often have to pay 8%-20% more than the current market price! However, this is understandable, as the cost of building and operating these machines can be expensive.
All in all, Bitcoin ATMs are both convenient and extremely user-friendly. Buying Bitcoins via one of these ATMs is a very good way to send bitcoin anonymously, however, prices can be high and not everyone has an ATM nearby.
HOW CAN I STORE BITCOIN ANONYMOUSLY?
If you’ve read my guide up to this point, you now know two ways to send bitcoin anonymously. If you are choosing the ATM method, then the ATM itself can provide you with an anonymous Bitcoin wallet address.
However, if you are using LocalBitcoins or Incognito, then the process doesn’t stop there. You now need to send your Bitcoin to an anonymous wallet.
When storing Bitcoin in a private wallet, you never have to provide any personal information. You can easily transfer funds in and out of your anonymous Bitcoin wallet, without having to supply any identification.
However, because Bitcoin operates on a decentralized network, you are in complete control of your funds. So, just remember this — if you ever lose the private key to your Bitcoin wallet, nobody is able to help you and you can lose access to all your funds.
Let’s look at some of the best anonymous Bitcoin wallets on the marketplace, each with their own advantages and disadvantages.
BEST PRIVATE CRYPTO WALLET TO USE IN 2020
1. Ledger Nano X– secure hardware wallet
The unique thing about this company is that it produces a range of hardware wallets that are designed especially for privacy-centric users. Ledger has two models, the Nano S and the one we’re focusing on, the Nano X.
Ledger Nano X is a reliable, anonymous BTC wallet. On the security front, it is a non-custodial wallet where you control your own private keys and if you obscure your ISP using a VPN, you’re as safe as can be when trading.
- Hidden Wallets: Hidden wallet data looks just like random bytes, so only the user knows they are there.
- 24-word mnemonic backups enable recovery of all funds if your Ledger Nano X is ever lost or stolen.
- This HD wallet allows you to hold over 100 wallets, each of which can generate millions of unique addresses.
In the future, you can expect more features utilizing anonymity to be available on Ledger Nano X. That’s the reason it’s on this list of best private crypto wallets.
2. Samourai Wallet – a good mobile wallet option
Samourai wallet is designed to keep your transactions private, mask your identity and keep your funds secure.
It achieves this by using the sophisticated AES-256 encryption system, which means that it does not communicate with any servers. There are also additional security features that allow you to store your funds safely, such as a PIN code and seed word backup.
- The wallet will alert you if you have sent funds to an address before, in order to prevent unintentional reusing of addresses.
- It also makes it difficult to link the inputs to the outputs of each transaction, meaning that clustering wallet addresses is more difficult. Samourai Wallet uses ‘stonewall’, which gives transactions higher entropy than standard bitcoin transactions, making them more complicated for potential hackers to analyze.
- The wallet is Tor and VPN enabled, allowing you to route all of your transactions through anonymous IP addresses.
The list of options has obviously grown over the past few years, so it’s important to consider how you are going to use your cryptocurrency wallet before you pick one.
TIPS TO IMPROVE BITCOIN PRIVACY
Whenever possible, avoid reusing addresses. Generate a new address for each transaction you receive.
While there’s little point updating a static address associated with your identity, such as a Bitcoin tip address linked to a social media profile, this is recommended practice in most other situations.
Remember when selecting privacy, security or encryption software that mature and open-source solutions are usually preferable. A single compromised account could leak all the passwords to your email, so make sure you manage your passwords correctly and safely. It can be difficult to memorize a different password for tens or even hundreds of accounts, so the solution is to use a good, random-word password along with a password manager. Password managers generate strong, lengthy and random passwords that you don’t need to memorize.
The program stores them in an encrypted format, so your passwords become accessible only when you enter your single master password into the manager (which again should be memorized and never written down).
FINAL THOUGHTS ON HOW TO STOP PEOPLE FROM SEEING WHAT I DO WITH MY BITCOIN?
To sum things up, it’s up to you to decide how much anonymity you actually need online. It’s obvious that the more anonymous you want to be, the more effort you’ll need to put into your activity online. Suffice to say, it’s worth protecting your assets and any of the methods listed above will go some way towards doing that.
Cryptocurrencies such as Bitcoin are a great way to send and receive money without using a centralized third party. People should have the right to send, receive and store their wealth without having to reveal their identity. In the same way, we do when we spend physical cash in the real-world.
That’s all from our side. This guide brought you the main tools and techniques at your disposal to stop people from seeing what you’re doing with your Bitcoin. It’s now up to you to experiment and find the way that works best for you. Good luck out there and stay safe!