Over the years, Bitcoin has proven itself as a reliable and lucrative currency that offers a number of benefits. This includes low transaction fees, as well as quick and secure payments. With that said, blockchain currency is not as private as conventional currencies. This doesn’t mean that it’s impossible to pay with Bitcoin anonymously though, just very difficult.
There are methods that you can apply to privatize your Bitcoin transactions for life. These methods allow you to buy coins privately through channels that would usually expose your transactions. You can even hide your transaction history so that no-one will ever see or trace any of your transactions.
If you want to find out more about the privacy concerns surrounding Bitcoin lately, read on. This article is all about how to overcome Bitcoin privacy issues using simple methods that allow you to transact anonymously.
The Anonymity of Bitcoin
Bitcoin is the oldest cryptocurrency in the world, so it comes as no surprise that it leads the pack in the security department as well. Bitcoins are extremely difficult to copy or steal even for the most talented cybercriminal, but this doesn’t take away from the fact that Bitcoin use isn’t inherently anonymous or private.
Like we said, Bitcoin is based on blockchain technology which means that each transaction is recorded and saved on a public ledger. The way blockchain technology works makes it very safe to transact with. For starters, transactions are verified through a stringent mining process. It would take a considerable group of very experienced miners to amass the computational power required to enable a false transaction.
It’s also worth noting that each transaction block that goes through the blockchain network is hashed and researched before it’s added to the next block. This makes for intrinsically linked blocks that make it practically impossible to augment a transaction once it has gone through.
Clearly, Bitcoin itself is very secure. But this safety doesn’t translate to the privacy and anonymity of transactions.
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Why You Should Look for More Anonymity
The most common issue that Bitcoin users have with the fiat currency is that it doesn’t offer transaction privacy. Pretty much anyone can go into the blockchain ledger and see your entire transaction history, down to the last decimal point. If someone can view your transaction history, then they can always plan a physical attack on you in the real world in order to get a hold of your Bitcoins.
Having a lot of Bitcoins places a target on your back and many people become vulnerable to criminals that want to access your crypto funds. In one example, a Bitcoin owner was kidnapped by criminals who wanted to gain access to his private encryption keys. There have also been cases of torture, breaking and entering as well as mutilation for the purpose of forcing the victim to reveal their private key and release Bitcoin funds.
All of these attacks are motivated by the same thing – to target individuals with a high net worth of cryptocurrency. If their Bitcoin transactions were private, these individuals may not have been targeted.
Here are a few other reasons why it’s important to pay with Bitcoin anonymously:
- Helps to keep your expenditure private and secret
- Prevents malicious attacks from hackers who want access to your private details
- Keeps advertisers from finding your spending history
- Allows you to keep charitable contributions private
- You can pay for medical services and procedures privately
- Provides a way to pay for services you want to keep private
The risk is even higher for business owners who transact through Bitcoin because it means all of your business transactions (which should be kept private) will be publicized. This includes trade secrets like supplier lists and client lists.
Buying and Paying with Bitcoin Anonymously
Now we get to the point of the article; how to pay with Bitcoin anonymously. Having shown you the risks that come with using Bitcoin, it’s time to unpack the methods you can use to minimize that risk by privatizing your transactions. It’s worth noting here that while it’s impossible to completely remain anonymous on Bitcoin, you can take certain measures to minimize your risk.
Read on to find out more about some of the most effective methods.
1. Create a Bitcoin Wallet
The first thing you should do before you purchase any Bitcoin is to determine where you want to send it. The safest place for it is in your Bitcoin wallet, a specialized space that safely stores your private keys. Now, Bitcoin wallets come in different types from different providers.
Hot wallets are by far the most popular type of Bitcoin wallet around and they’re available in different versions. You can get them from a web browser, a mobile app or a desktop client. Device operated wallets are considered safer and have less exposure to hackers. The only downside to this type of wallet is that you need to back it up regularly. You could choose cloud-based wallets which come with automatic backups, but they’re not as secure as the former.
If you opt for a software wallet, make sure it has corresponding apps for the devices you use on a daily basis, like the smartphone and laptop, for example. Don’t forget to check out reviews to find out the pros and cons that come with each wallet that you’re considering.
Another option that you can pick is a hardware wallet. In this case, the TREZOR Ledger is a good option because it provides cold storage that you can access on a separate device. This keeps your private keys private. The only downside to hardware wallets is that they’re more expensive and start at $100, but they’re worth the cost for anyone with a considerable amount of Bitcoin.
It may also be helpful to use multiple wallets. But, for the purpose of keeping things simple, just go for the best option which in our opinion is software wallets because they’re great for short-term options, whereas hardware wallets work best for storing large amounts over long periods of time.
2. Buy BTC
There are many options when it comes to the different places where you can purchase Bitcoin. Just keep in mind that each method comes with its own level of risk, cost and privacy.
• Coin Exchanges
A coin exchange is easy to use, but it requires that you share your payment details with a third party. However, you could always recover anonymity when mixing coins after the exchange. Some of the most popular exchanges to check out include Bittrex, Kraken and Coinbase. These exchanges allow you to send your Bitcoin to your wallet address as soon as you’ve purchased it through your credit card or bank account.
• Private Sellers
Buying Bitcoin from a private seller improves your ability to transact privately. You can easily connect with Bitcoin sellers on sites like Bisq and LocalBitcoins. Both websites are great for negotiating awesome deals on Bitcoin while enjoying better rates. The key to using these platforms safely is to buy from reputable sellers only.
• Bitcoin ATMs
Nowadays, you can even purchase Bitcoin through an ATM. The great thing about this option is that it doesn’t require any ID verification. All you have to do is give the wallet address and insert the cash. You’ll pay exorbitant transaction fees, which are worth it when balanced against the convenience they offer. These machines are usually conveniently located away from cameras or other monitoring systems that may compromise your privacy.
3. Mix Your Cryptos
Mixing your coins is another easy method you can use to pay with Bitcoin anonymously. This practice is often referred to as coin laundering or tumbling. All you have to do is mix coins from different parties until you blur the line between the sender and receiver.
4. Pay with Bitcoin
Once you’ve received your clean Bitcoin, you should make sure that all your transactions remain untraceable. The best way to pay with Bitcoin anonymously is to use the Tor browser. Also, make it a point to find merchants that accept Bitcoin and don’t need PII.
• Physical Goods
When buying physical goods with Bitcoin you must provide a physical address where the products will be delivered. The best way to keep things private in this case is to use a work address or PO Box. That’s because both of these options are private and don’t have a direct link to you. The good news is that some merchants don’t actually maintain a record of customer details such as PII and address. That way, you can rest assured that you’re enjoying an anonymous purchase.
• Digital Goods
Let’s say you want to buy a digital product such as an e-book, software or music. In that case, you don’t have to offer a physical address and the merchant should have a .onion site to facilitate the private transactions. If the merchant asks for an email, provide a burner email that’s not connected to your personal email.