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Bitcoin is a pseudo-anonymous, which means that all transactions made using the cryptocurrency can be traced. The transaction graph for BTC is public.
This means that anyone having proficiency regarding dissecting private and public cryptocurrency addresses can club them together. And link them to email, IP addresses, and social media accounts of users.
Apart from this, there are a lot of other ways to trace your bitcoin activity. But there are a few tested methods that can help you make your BTC transactions private.
Use New Addresses To Receive Bitcoin Payments
As per bitcoin.org, as a user you should always employ the use of new addresses every time while receiving BTC payments. On top of this, to maintain privacy in bitcoin transactions, you can consider using multiple wallets.
By doing this, you would effectively isolate all your BTC transactions. This would make them difficult to be associated with each other. Bitcoin.org impresses upon this method as the most important one to make BTC transactions private. Why?
Folks who send you funds through bitcoin won’t get a clue about your other BTC addresses and what you do with them.
Mask Your IP With Tor
It is quite possible to listen to the relays of your bitcoin transactions. Also, the same can lead trackers to log the IP addresses of the devices that you may have used to make your valuable BTC transfers.
There is a solutions for this. You can go private for conducting a bitcoin transaction. Preferably with a tool like Tor. This will hide your IP address and make your BTC activity less vulnerable to be tracked.
Also, you can become a full node in the bitcoin network. As a full node client, you would be able to relay all the transactions, which would make it extremely difficult to pinpoint a particular bitcoin transaction worth a particular value that you made.
Use BTC Mixing Services
A bitcoin mixer can prove immensely helpful in hiding your bitcoin transaction activity or in breaking traceable links to your BTC addresses.
How does mixing achieve this? By receiving and sending back the same value of bitcoin using independent BTC addresses. Also, there is a provision of interchanging bitcoins (BTC addresses) having the same value. The video below will explain it better.
But there are risks associated with bitcoin mixing. Listen to Andreas Antonopolous discuss them in the video below:
Never Post Your Public Bitcoin Address on Public Forums
As a responsible bitcoin user, you should refrain from making your BTC address public. Also, you must never share information pertaining to your bitcoin transactions and purchases made if any using BTC. This could lead someone to identify your bitcoin addresses.
Also never reuse the same bitcoin address again and again. Reusing BTC addresses will highlight you as an active bitcoin user and could make you a potential target for hackers and online robbers.
If you have no choice but to make your bitcoin addresses public (to receive payments) make sure to use mixing or Tor as mentioned above. To remove any trace or proof of your Bitcoin network usage.
Leverage A Logless VPN For BTC Payments
The thing with logless virtual private networks is that they don’t store your browsing history on their servers.
A logless VPN network encrypts all packets of information sent from your computer/phone and routes it through multiple servers (selected by you) situated in different locations before delivering them at the destination.
In some cases logless VPNs provide the same IP address to multiple users thereby making it difficult to pinpoint and trace the online identity of a particular individual.
However, you have to ‘trust’ the VPN service provider to not log your bitcoin transaction activities.
Also you can download the app and Start Trading Now!
Android App – Bitcoin Exchange
iOS App – WazirX
Frequently Asked Questions
What Is The Meaning Of Bitcoin?
Bitcoin is a type of cryptocurrency that was first introduced in January 2009. It is invented based on the key concepts and notions presented in a whitepaper by Satoshi Nakamoto, a mysterious and pseudonymous figure. The name of the individual or people who invented technology is yet unknown. Bitcoin promises reduced transaction fees than existing online payment methods, and a decentralized authority controls it, unlike government-issued currencies.
Is Bitcoin Cash A Good Investment?
Bitcoin Cash is a hard fork of Bitcoin formed in 2017 to address Bitcoin's scalability and challenges. Bitcoin Cash seeks to make global transactions faster, cheaper, and more secure. Bitcoin Cash is now accepted by thousands of online and offline businesses all over the world. Studied correctly, Bitcoin Cash may be an investment worthy of consideration.
How Bitcoin Mining Works?
Bitcoin mining is a crucial element of the blockchain ledger's upkeep and development and the act of bringing new Bitcoins into circulation. It's done with the help of cutting-edge computers that solve exceedingly challenging computational arithmetic problems. Auditor miners are rewarded for their work. They're in charge of ensuring that Bitcoin transactions go through smoothly and legitimately. This standard was established by Satoshi Nakamoto, the founder of Bitcoin, to keep Bitcoin users ethical. By confirming transactions, miners assist in avoiding the "double-spending issue."
What Is Bitcoin And How Does It Work?
Bitcoin is decentralized digital money that may be bought, sold, and exchanged without an intermediary such as a bank. Bitcoin is based on a blockchain that is considered to be a distributed digital ledger. As the name suggests, blockchain is a linked database made up of blocks that store information about each transaction, such as the date and time, total amount, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological order to form a digital blockchain
How To Create Bitcoin Account?
Firstly, Go to the WazirX website and sign up. Then, a verification mail will be sent to you. The link sent via verification mail would be available only for a few seconds so make sure you click on the link sent to you as soon as possible, and it will verify your email address successfully. The next step is to set up security, so select the most suitable option for you. After you have set up the security, you will get a choice to either proceed further with or without completing the KYC procedure. After that, you will be directed to the Funds and Transfer page, where you could start depositing Bitcoins to your wallet. You can also deposit INR and then use it to buy Bitcoin for your WazirX Bitcoin wallet.
Is Bitcoin A Good Investment For The Future?
Some investors are afraid of the risks or devastation, but others are very eager to pursue the possibility of profit from a Bitcoin investment. A Bitcoin investment is similar to stock investing, except it can be more volatile.
How To Convert Bitcoin To Cash?
There are many ways of converting Bitcoin to cash, such as crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, Peer to Peer Transactions. You can use cryptocurrency exchanges such as WazirX for this. Unlike typical ATMs, which allow you to withdraw money from your bank account, a Bitcoin ATM is a physical location where you may buy and sell Bitcoins using fiat currency. Several websites provide the option of selling Bitcoin in return for a prepaid debit card that may be used just like a standard debit card. You can sell Bitcoin for cash through a peer-to-peer platform in a faster and more anonymous manner.
Is Bitcoin Legal In India?
In India, Bitcoin is not illegal. Because of cryptocurrency's rapid evolution, policymakers and regulators seemed to have recognized the chance to accept the new technology early. From the infamous 'RBI ban' in 2018 to reports of an impending bill banning cryptos in 2021 that has yet to develop, India has seen its fair share of ups and downs when it comes to Bitcoin regulation. Last year, the Supreme Court Of India approved the use of Bitcoin throughout the country. According to the Supreme Court, the existence of Bitcoin or any other cryptocurrency is unregulated but not unlawful.
Is Bitcoin And Cryptocurrency The Same Thing?
Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.
What Are The Chances Of Bitcoin Crashing?
Two Yale University economists (Yukun Liu and Aleh Tsyvinski) produced research titled "Risks and Returns of Cryptocurrency" in 2018. They looked at the possibility of Bitcoin crashing to zero in a single day. The authors discovered that the chances of an undefined tragedy crashing Bitcoin to zero ranged from 0 percent to 1.3 percent and was around 0.4 percent at the time of publishing, using Bitcoin's history returns to determine its risk-neutral disaster probability. Others claim that because Bitcoin has no intrinsic value, it will inevitably crash to zero. On the other hand, Bitcoin advocates argue that the currency is backed by customer confidence and mathematics.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
