What Makes Bitcoin Anonymous
By reading the article “What Makes Bitcoin Anonymous?” published in Adaas Investment Magazine, you will get acquainted with the review of the anonymity of bitcoin transactions and what are solutions to make them anonymous in general. This level of familiarity can be enough when you need educational information about this topic.
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Table of Contents
What Is The Cryptocurrency?
Digital currencies are known as digital money or internet money. These currencies are completely Internet-based and there is no possibility of physical connection with digital currency. A group of digital currencies, Cryptocurrency, the protocol for making and using them is different from other models of digital money.
What Is The Bitcoin?
Bitcoin cryptocurrency is an unsupported digital currency and economic system. In traditional economics concepts, to create a currency such as the US dollar, a backing such as gold or the country’s assets must be introduced as the guarantee of the value of money. Bitcoin innovates economic concepts and introduces an unsupported digital currency based on Internet and blockchain technologies. With the aim of Peer to Peer payment, Bitcoin has succeeded in developing its own blockchain and economic model of earning money through the bitcoin mining process. Bitcoin has also become a popular online currency among Internet users and many financial market investors.
Are bitcoin transactions anonymous?
Many people believe that bitcoin transactions can never be detected and traced by following unreliable sources. As you probably know, Bitcoin offers a public blockchain that has been slightly enhanced by the recent Taproot update.
Public blockchain means that everyone has free access to all transaction information such as the sender and recipient address of the transaction, the amount, and other pointers. With the advancement of technology and the development of companies like ChainAnalysis, tracking bitcoin transactions is no longer a difficult task and it can be said that bitcoin is not completely anonymous.
What can make Bitcoin anonymous?
As you may have noticed at the outset, the information encryption algorithms in the Bitcoin blockchain make it almost impossible to access individuals’ legal information. Thus, the sender’s address, which is secured by cryptographic algorithms, does not provide a way to reach its owner in the real world.
There are reliable ways to operate anonymously in the cryptocurrency world without being traced. Here are some of the most popular ways to send anonymous transactions.
Use Bitcoin mixer
Some companies have provided bitcoin mixer products to their users in exchange for commissions, which is one of the most popular ways to send and receive bitcoin transactions anonymously.
Simply put, the Bitcoin Mixer is a tool for enhancing user privacy in public blockchains that uses a transaction mixing mechanism. Like the Bitcoin mining process, where people are paid to solve equations and confirm transactions, in the bitcoin mixing process, mixers will be paid for mixing transactions to eliminate the sender and recipient of the transaction.
If you want to read about this technology, you can use the link below.
Use Privacy provider cryptocurrencies
As you know, all cryptocurrencies operate in one business context. The cryptocurrencies of the anonymity service provider in transactions are:
- Tornado Cash
Due to the very complex encryption of data in the blockchain of cryptocurrencies such as Monero, no individual or organization is able to obtain information such as the address of the sender and recipient of the transaction or the amount of tokens sent in the transaction.
The cryptocurrencies that provide this service have been able to best protect the privacy of users. With this in mind, these cryptocurrencies are used in all transactions where the parties to the transaction agree to non-disclosure of transaction information.
To send and receive anonymous transactions, in addition to the solutions introduced, following and using the tips that we have prepared for you in the following can help your activity to be anonymous.
- Using the TOR browser generally keeps all your Internet activities anonymous. You can use the TOR browser when using the Internet to leave no trace.
- Always try to use new addresses for your transactions. This will make it practically impossible to find and link different addresses to all of your transactions, and your transactions will remain anonymous.
- If the public address of the wallet that is known to you is exposed to the public, be sure to try another wallet. You can also use HD wallets or Ledger Nano X to generate an infinite number of transaction recipient addresses to keep your activity anonymous.
- Buying and selling bitcoins Person to Person using platforms such as LocalBitcoins is another suggested way to buy and sell bitcoins anonymously. Note that this solution carries risks such as fraud or theft, which you must be a little more professional than usual to ensure that your transaction is done correctly.
What is the significance of anonymous transactions?
Many institutions and companies tend to keep their transactions hidden from competitors and enemies because of the great importance of data protection. A feature that Bitcoin’s central competitors, banks and other payment systems, provide to these large companies.
Also, if a large amount of assets are stored in a bitcoin address and the information of the real owner is published, the possibility of kidnapping or theft is very high for that person.
These are just a few of the risks of non-anonymous transactions for individuals and institutions. Be sure to note that it is your responsibility to protect your personal information and be very diligent in protecting it.
The end words
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With the development of companies like ChainAnalysis, tracking bitcoin transactions is no longer a difficult task and it can be said that bitcoin is not completely anonymous.
There are reliable ways to operate anonymously in the cryptocurrency world without being traced. Here are we published some of the most popular ways to send anonymous transactions.