How to use bitcoin anonymously

Using Bitcoin Anonymously

One of the biggest misconceptions surrounding bitcoin is whether or not digital currency is truly anonymous. The simple answer to that question is “no, not entirely.” But a certain level of anonymity is tied to using bitcoin and digital currency in general. Whether you can label that as “anonymous enough” is a personal opinion.

Whenever you use bitcoin to move funds around, you can essentially hide your identity behind a bitcoin wallet address. These wallet addresses are a complex string of numbers and letters (both lower‐ and uppercase) and provide no insight into who you are or where you’re located. In that regard, bitcoin offers a certain level of protection you won’t find in most other payment methods.

But that is also as far as the anonymity goes, because bitcoin wallet addresses are part of a public ledger; the blockchain - which tracks any incoming and outgoing transfers to and from any address at any given time. For example, if we were to send you 0.05 BTC right now, anyone in the world could see the transfer from wallet address Y to wallet address Z. No one would know whom those addresses belong to, but the transaction itself would be in plain sight.

Once someone knows your public wallet address, they can monitor it at the www.blockchain.info website at any time. In doing so, not only will they see current transactions, but blockchain.info will also display a list of all previous transactions associated with your bitcoin address. As a result, if someone knows your public wallet address, there is no real anonymity when it comes to using bitcoin, as all of your financial transactions are publicly visible.

Whenever bitcoin exchanges are involved, anyone can see a transfer from your bitcoin wallet to the wallet address of the exchange, as these are publicly listed in most cases. However, if you sell your bitcoin, it becomes a lot harder to track where those coins went to. In that regard, there is a small sense of anonymity, but once again, it depends on your personal opinion as to how secure this is.

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