It appears there is still a lot of confusion regarding the anonymity of cryptocurrencies. More specifically, many people still think Bitcoin can be used to “hide” transactions. That is not the case whatsoever, as nearly everything about a Bitcoin transfer is recorded on the blockchain in real-time. In fact, there are at least three other currencies which would be better suited for this purpose. Privacy and anonymity are not native traits to cryptocurrency, that’s for sure.
Achieving privacy or anonymity in the world of cryptocurrencies is difficult. Relying just on Bitcoin will not get you very far in this regard. It is certainly true the world’s leading cryptocurrency has pseudonymity traits. There is no personal information linked to the sender or receiver directly. All the world sees are two wallet IDs, a transaction hash, and the amount of BTC being transferred. However, that doesn’t make the missing information private by any means. If you want to send a transaction without anyone else knowing about it, Bitcoin certainly shouldn’t be one’s first choice.
Bitcoin Provides Pseudonymous Privacy but not Anonymity
Over the past few years, we have seen multiple incidents involving Bitcoin transactions leading to arrests. In virtually every case, the person arrested was identified because of using Bitcoin. It doesn’t magically protect you from prying eyes under any circumstance whatsoever. In fact, transfers can easily be followed on the blockchain with just a browser. Additionally, there are advanced blockchain analysis companies who specialize in linking user identities with Bitcoin transfers. It is impossible to hide, even when using mixing services or other solutions.
Thankfully, there are some other currencies which can solve this problem. Providing privacy and anonymity is not easy and requires a lot of work. Three coins come to mind immediately in this regard: Monero, ZCash, and Dash. All three currencies try to achieve varying degrees of privacy and/or anonymity these days. Both Monero and Dash have been around for several years now, with a solid reputation. ZCash is still a bit of a mixed bag as its rate of adoption is seemingly lower for now. Given a bit of time, that situation can certainly change.
Additionally, one has to keep in mind not everyone who desires more privacy will do so for nefarious purposes. It is evident there is a major disconnect in this regard lately. Privacy means “living off the grid” for a lot of people for legitimate reasons. Not everyone wants to be swept up in the traditional financial sector for various reasons. Especially preventing third parties from checking out your shopping habits is one proper use case. Bitcoin simply isn’t designed to mask a lot of personal information. It does the job fine to not have anything tracing back to you as long as it isn’t for nefarious purposes.
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