Bitcoin Anonymity and Security Though Bitcoin isn’t truly anonymous, it’s one of the more private cryptocurrencies on the market right now. The pseudonymous nature of the transactions and lack of personal information attached to each wallet prevents many people from associating real-world identities with Bitcoin wallets or transactions, which gives users a certain level of anonymity and security over other cryptocurrencies like Dash and Monero. Here are some ways that you can enjoy this benefit as well when making your Bitcoin transactions. What Is Bitcoin Anonymity? Bitcoin is pseudo-anonymous, but that doesn’t mean you should rely on it for true anonymity. Bitcoin records your transactions, so some of your information can be discovered by anyone who looks hard enough. There are ways to add a layer of protection between yourself and anyone looking to identify you, however. A VPN encrypts all of your information before transmitting it to any site or service you visit—including Bitcoin exchanges or other merchants where you might leave a trail. If you use a VPN with Bitcoin, no one will know what you bought, how much money you sent or received, or what IP address (or country) your computer was using at any given time. This makes it much harder for hackers to steal your identity or otherwise compromise your security. The Disadvantages of Bitcoin It is hard to use Bitcoin anonymously due to their semi-transparent nature. Although Bitcoin can be anonymous, it’s only partially anonymous. If you share your name, address, or social security number with a company that has your bank account information, then that company can see your transactions and even sometimes your balance. This means that if you buy something online using Bitcoin, they could potentially find out who you are through your bank. Also, since all of your transactions are recorded on a public ledger called blockchain anyone can track down how much money someone owns by looking at all of their past transaction records. This is why many people choose to make purchases using a prepaid credit card which isn’t linked to any personal information such as an ID card or social security number. A Simple Solution For Anonymous Payments There’s a simple solution for anonymous payments. Use bitcoins to make peer-to-peer payments. In addition to being decentralized, bitcoins are anonymous and extremely secure because they are not tied to any centralized institution, like a bank or government. Because bitcoin transactions occur online through a digital wallet, instead of physically handing over cash, online shopping can be completed safely with no record of personal identity. Use bitcoin mixer links here. This means that you don’t have to worry about your credit card information being stolen. It also means that merchants do not have access to your name, address, credit card number or other sensitive information that could potentially be used in identity theft. You can use bitcoins anonymously, but if you want to be able to spend them at physical locations or online stores (and avoid paying high transaction fees), then you will need a bitcoin wallet. The best bitcoin wallets are available on mobile devices so that you can easily complete transactions on-the-go. You should also look for a bitcoin wallet that allows multi-signature functionality so that more than one person is required to approve each transaction before it is processed. How To Purchase Bitcoins Bitcoin purchases can be made through exchanges, brokerages, etc. This requires linking your bank account with a bitcoin payment processor. Purchasing bitcoins anonymously can be challenging due to fraud prevention concerns. However, there are ways to obtain bitcoins without any trace of ID. For example: Bitcoin ATM’s, gift cards (eGifter), LocalBitcoins meetups or joining one of many growing Bitcoin communities to find new ways of obtaining Bitcoins anonymously or face-to-face. A list of exchanges is available here. Additionally, there are many marketplaces for trading in cryptocurrency that do not require an ID; some examples include: Paxful and CoinCola. The security of Bitcoins is primarily based on three features that protect them from being stolen by hackers or government authorities: no personal information attached to transactions, irreversible transactions once they have been broadcasted over the network, and most importantly – no central point of failure; if someone steals your bitcoins you will still have access to them because you own them. Using Bitcoins Bitcoins are virtual cash, but that doesn’t mean they aren’t real. In many ways, Bitcoin is similar to online banking or other online financial systems that make it easy to access your money from virtually anywhere. When you fund a Bitcoin wallet, it gets associated with your public address (similar to an email address), which can be shared freely without any risk of fraud or identity theft. Unlike credit cards, however, bitcoins cannot be used to purchase physical goods or services; instead, they can only be used to purchase digital goods.
