Bitcoin is a digital currency and an electronic form of cash. It is also called a “cryptocurrency”. It is used in online transactions between users. It was developed by a group of people under the pseudo name of Satoshi Nakamoto in 2009. Bitcoin transactions are carried out online and online alone. This means that users are likely to leave behind digital footprints. This makes it easy for your identity to be discovered by those who know what they are looking for and how to look for it. Bitcoin is an innovation that caters to the demand for a currency that is exclusively for the internet.
Despite its advantages, some observations can also be made about the reliability of this cryptocurrency. Some of these are:
- Volatile prices
- No refunds on transactions
- Susceptibility to internet fraud
- It is not universally accepted (yet)
- Vulnerability to cyber threats
- Regular shifts and changes in the market
- Large investments without proper knowledge could prove to be a loss
- It may be used for illegal transactions
Below, we would like to take a look at some methods to make your Bitcoin transactions anonymous.
One of the ways to keep your identity hidden is to use Coinjoin. The idea behind this is that several people pool Bitcoin resources together, then they can take out the exact amount they contributed. This way, it is not easy to trace your output.
Using this method, Bitcoins are exchanged or swapped between two users. Bitcoin mixing can be paid or free depending on the service, but we would avoid the free ones. It creates privacy in the sense that, it is difficult to identify that a mixer has been used. Also, the people involved do not have much information about each other so each participant cannot be traced easily.
Your internet traffic will be encrypted, thus making it difficult to trace. Your internet activity is encrypted and dispersed through various servers before reaching the target destination or location. Most VPN providers also possess multiple shared IP addresses that apply to more than one user so a particular user cannot be pinpointed. There are various service providers of logless VPN. Keep in mind that while your connection is secure your Bitcoin transactions are still public!
Bitcoin was the first successful cryptocurrency. With its success, some other cryptocurrencies were also launched in the market. All these currencies, which are other than the Bitcoin, are known as Altcoins. The basic purpose on which Altcoins have been circulating in the market is to deal with the limitations that bitcoin is plagued with. Fortunately, most of the positives of Bitcoin have been retained by these currencies. 90% of Altcoins work on the same principle of mining as that of the bitcoin. However, the proof of work is different. Moreover, security enhancement to keep anonymity strong is also part of the features that some Altcoins provide like Monero, Dash and ZCash.
Use a Bitcoin HD Wallet to make bitcoin transactions:
Hierarchical Deterministic (HD Wallets) are platforms which serve the purpose of sending and receiving Bitcoin by creating a unique address for a user’s transactions. Each time a new user address is created, it increases the privacy and safety of your online finances. Anyone who intends to check your financial status or your transaction history will have a hard time tracing transactions down to you.
Generally speaking, Bitcoin transactions are designed to be anonymous and have a lower risk for the user. However, it is not always 100% safe. Before you carry out any transactions, try to understand how the system works and the general requirements. Bitcoin is estimated to continue for many more years as long as there are Bitcoin miners. In a few years’ time, it is likely to grow to become one of the major currencies people use to make transactions in and outside the internet. We expect that changes would have been made by then and it would be safer and more reliable to use by a larger percentage of people around the world.
Bitcoin is turning out to be a major shift in the financial sector. So, it is better and recommended to know how to get anonymous with BTC.
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