Bitcoin is often thought of as anonymous because it can receive and pay without providing personal identification information, but this digital currency is not really anonymous. Follow this article to explain why Bitcoin is not anonymous.
Are Bitcoin transactions really anonymous?
Although we do not need to provide personal information to conduct transactions in Bitcoin, the blockchain and bitcoin network are completely transparent and you can track a specific transaction or address from origin to destination.
So we can say that Bitcoin is “semi-anonymous”. Achieving an acceptable level of anonymity in this network is a bit complicated and complete anonymity is impossible.
Using websites called Bitcoin Explorer (Explorer) such as Blockchain.com You can track a bitcoin address and all related transactions.
Receiving and paying for bitcoins is like writing an article or a book with a pseudonym. If the author’s nickname is somehow related to his or her true identity, any content written under that nickname will belong to the author.
In other words, in the Bitcoin network, you do not need to provide personal information, but if you use a centralized entity such as a digital currency exchange, you can reject the transaction made to the exchange, and since the exchanges receive names from customers , Your identity can be obtained through an exchange.
In the Bitcoin network, your nickname is the address with which you receive the bitcoin. Any transaction made with that address will be stored in the Blockchaink forever. If your address is somehow linked to your true identity, all transactions made with that address will be related to you.
Is it possible to perform a completely anonymous transaction in Bitcoin?
As we said, Bitcoin is a semi-anonymous network, and since its transactions can be tracked, if you send any transaction to a centralized entity that is aware of your identity, the anonymity of the transaction will disappear. Even if you do not centralize your identity information, your identity can still be accessed via IP Internet.
The transaction can only be anonymous if you are not in any way associated with an exchange office or store or any other centralized entity, which is almost impossible in everyday life.
The Bitcoin article advises users to use a different address for each transaction to prevent all transactions from being associated with one person. This is equivalent to printing different articles under different pseudonyms.
There are several options for increasing transaction anonymity in Bitcoin, which can be summarized as follows:
In this way, the link between bitcoin transactions is broken at a point that makes it difficult to track. In the mixing method, for example, a 3-bitcoin transaction is converted to 3 one-bitcoin transactions so that it is difficult to identify the destination of the transactions. The anonymity of the transaction is greatly increased in this method.
People can use the Tor browser to connect to the Bitcoin network. The browser somehow disrupts the IP tour and network traffic.
Use VPN without log
A virtual private network (VPN) without a log is a network that does not store the history of its users on its servers. This way, no trace of the user’s Internet traffic information will remain.
Use a new address for each transaction
Popular wallets often use a method called HD, which changes the wallet address after each transaction, but previous addresses are still valid. Using this method regularly increases the likelihood of anonymity. In this case, it will be very difficult to link more than two or more transactions to the identity of the person.
Cash and in-person transactions
Another way to keep Bitcoin transactions anonymous is to do the transaction in person and in cash. In this method, the buyer makes the purchase in person and with paper money or using a bank card (such as card to card). In this case, no information will be recorded on exchanges or other platforms.
Are there anonymous digital currencies?
Yes, there are several digital currencies called Privacy Coins. The transactions of these currencies are not transparent and one transaction cannot be traced.
The following are some of the most important digital privacy currencies:
Privacy and anonymity in the above digital currencies are very high, but it still seems to be a way to track the transactions of these currencies and identify the sender and receiver.
Recently, US Counter-Narcotics Agency (DEA) Special Representative Lilita Infante said in an interview that persistent digital currencies such as Monroe and Zyx could be attractive alternatives for criminals, but that their scope and liquidity are not currently widely used. To take. He asserted that his confession had been obtained through torture, but that he did not know the exact details.
Asked if the network’s transactions were 100 percent secret and untraceable, Monroe’s official website said: “Nothing is 100 percent, but we do our best to bring the utmost privacy to our users.”
Bitcoin transactions are semi-anonymous, which means that you do not need to provide a name or identity to use the Bitcoin network, but since the Bitcoin network is transparent and a transaction can be tracked, if your transaction to a centralized entity such as If an exchange office has your name and information, your identity can be obtained.
On the other hand, it is possible to find the sender using the Internet IP used by the user.
Of course, with the methods we introduced above, it is possible to greatly increase transaction anonymity, but complete anonymity in bitcoin is almost impossible.
In addition to bitcoin, there are many digital currencies that promise anonymous transactions, and their blockchain is not transparent. However, it is still not possible to guarantee 100% anonymity of a transaction.