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Most people perceive Bitcoin as an anonymous payment method. However, the reality is that Bitcoin is a transparent value transfer system. But this digital currency provides acceptable privacy levels, provided you use it correctly. Bitcoin users should never forget that adopting good practices to enhance their privacy is their responsibility.
Generally, this virtual currency operates with an unpredictable transparency level. And most individuals are not accustomed to this transparence. Every Bitcoin transaction is permanent, traceable, and public. The Bitcoin network uses blockchain technology to store transaction data permanently.
However, people use Bitcoin addresses only to define the allocation and destinations of the tokens. And the users’ wallets create these addresses privately. Nevertheless, all transactions’ history taints every Bitcoin address after use. Any Bitcoin user can trace the transaction and balance of any address.
Because a user reveals their identity when receiving goods and services, Bitcoin addresses are not fully anonymous. And because blockchain is permanent, it’s crucial to note that anything untraceable now might become trivial when you try to trace it in the future. Thus, people should use Bitcoin addresses once and take precautions not to reveal them.
Use New Addresses When Receiving Payments
One way to enhance your privacy when using Bitcoin is to use a new address whenever you need a new payment. Also, use different wallets for various purposes. Once you do this, you can isolate every transaction and make it impossible for a person to associate them with you. When sending money, a person can’t see your other Bitcoin addresses. Also, they can’t know about your transactions with different crypto addresses. Perhaps, this is the best way to enhance your privacy when using Bitcoin.
Be Careful in Public Places
Transacting with Bitcoin in public places is not a good idea unless receiving public payments or donations with complete transparency. Ideally, never publish Bitcoin addresses on public spaces like social networks and websites. If you must do so, remember that the public address’s history will taint the crypto address if you use it to move funds to your other Bitcoin addresses.
Also, be careful with the information you publish online about your purchases and transactions. That’s because some people can use this information to identify your addresses. On the same note, avoid accessing your digital wallets using public Wi-Fi networks. That’s because most of these networks are insecure, thereby exposing your information and device to threats.
Use a Virtual Private Network
If you have an account with a crypto exchange like Immediate Edge or want to access your digital wallet away from a secure work or home network, use a virtual private network. A VPN is software, providing a safe internet connection. That way, third parties can’t read or intercept your data. Thus, using a VPN safeguards your privacy when using, accessing, or trading Bitcoin.
Secure Your Phone or Computer
Bitcoin has new emerging threats all the time in the form of malware. Some criminals use viruses and malware to steal information from device owners. If a criminal has access to your passwords, they can breach your privacy.
Hide Your Computer’s IP Address
If you suspect that somebody wants to breach your privacy when using Bitcoin, consider hiding the IP address of your computer. Bitcoin uses a peer-to-peer network. That means a person can listen for the transactions’ relays and even log IP addresses. Ideally, a full node client relays all users’ transactions like theirs. That means finding a particular transaction’s source can be difficult. A person can mistake a Bitcoin node as the transaction source when it’s not. Thus, you can use an innovative tool to hide your IP address if you suspect that somebody wants to log it.
Bitcoin users consider this virtual cryptocurrency secure due to its underlying blockchain technology. However, criminals can find a way to breach your privacy when using this digital currency. Try these tips to enhance your privacy when using Bitcoin.
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