At first glance it seems that Bitcoin is anonymous, but if you look at the blockchain, a fundamental characteristic of this cryptocurrency, you will realize that it is not so hidden.
What happens is that people tend to confuse the concepts of incognito and pseudonym to refer to what they believe is anonymous in this crypto.
However, it is important to know that digital currencies reveal much more information about their users than you might think. Why? What is the purpose? How to protect yourself? Let’s see next.
Is Bitcoin anonymous? The address and pseudonym
Where you receive your bitcoins is like a bank account, but they are called wallets. It consists of a random series of digits and letters, the transactions of which are reflected in a Blockchain, a ledger accessible to all.
In it you can see the addresses that bitcoin uses to send and receive coins, which makes it easy to track them, addresses that are not anonymous, but a pseudonym.
That is, these wallets encode and change your real name for a code with numbers and letters.
When does Bitcoin stop being anonymous?
In the crypto ecosystem, the privacy of transactions is often talked about. The good news is that due to the proliferation of cybercriminals and/or spies, many now understand the importance of privacy and hire encrypted servers for data and voice communications.
Understanding that, Bitcoin seeks solutions to the main information leakage points:
The IP
E l Bitcoin is a P2P network: the computer or phone is always connected to others, thanks to the internet.
But if you are a victim of spies, they will be aware of when a transaction is transmitted, which they could combine with a type of database to obtain information about who you are, your tastes and preferences.
Use of web or lightweight wallet
In this type of wallets, you delegate your privacy to a third party (even your bitcoins), since your IP, browser, operating system, visited pages are exposed.
Exchanges
Some platforms for buying and selling bitcoins can share information about their users, reveal their identities, addresses and transactions.
Measurements and identification
In 2017, Bitcoin reached its all-time high, reaching almost $20,000, an increase that aroused the interest of many and led governments and principalities to discuss the anonymity of cryptocurrencies and minimize the risks involved.
One of the key regulatory points is identification. For this reason, they have asked exchange platforms (such as Cex.io and Coinbase) to ask their users for an ID before using it or trading it.
Of course, this regulation does not make Bitcoin anonymous, only that transactions can be made without using the network, making it difficult to track payments, although there are ways to investigate who made them.
Ways to improve your privacy in Bitcoin
Depending on the information you reveal, as a Bitcoin user you will have some privacy. We have selected a few ways that may have a degree of vulnerability if corrupted, but are undoubtedly much more secure.
VPN
It is a virtual private network that allows you to connect two or more computers in a secure way, you can route all communications and mask your real IP.
Mixers
They are services that mix one person’s bitcoins with those of others before they reach the destination, a service that follows identifiable patterns, thanks to blockchain analysis.
Different directions
When you divide your money in multiple directions and use a different one for each payment, you will be complicating things for cybercriminals. Normally the programs that act as a wallet generate new addresses for each transaction.
TOR
It is free software that allows you to create a distributed network and surf the Internet with a high degree of anonymity, although you should know that spy nodes can also exist here.
Exchange houses
They are an alternative that hides the trace of bitcoins from the naked eye, since they are mixed with many others and the withdrawal can be made to a new address. However, as it is a centralized service, certain information could be leaked.
Wallet with node
One of the best practices to keep your bitcoins more secure; you have control over it and add layers of complexity to the use of Bitcoin.
Conclusion
So is Bitcoin anonymous? No, and no cryptocurrency is completely cryptocurrency, what we recommend is that you protect your digital assets, since someone is always on the prowl looking to steal crypto. We also recommend using a secure wallet so that your Bitcoins are safe.
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