Cryptocurrencies like bitcoin are generally misconceived as completely anonymous whereas they can be tracked easily by researchers and investigators via distributed ledger called blockchain, which is a connection of a number of computer system who check whether the transactions are genuine and secured. These skilled technocrats can extract anyone’s personal data through web trackers which are hidden programs installed in one’s computer.
In fact, there’s no such way to attain complete anonymity yet some practices can help you protect your transactions from government authorities and spies.
Step 1: Avoid third-party interference: store your bitcoin personally.
Keep your money away from the custodial exchange as these sites retain one’s identity. This makes your privacy vulnerable as they may share your details with law enforcement agencies. Instead, set up a bitcoin “wallet” which is a software application that allows you to send or receive bitcoins in a peer-to-peer fashion, directly from your PC. One doesn’t need to share the secret codes with a third part for storing bitcoins, whereas one maintains them himself.
It is advised to run bitcoin wallet on a reasonable, dedicated PC laptop with the open-source Tails Linux operating system, which makes internet use hard to track. The design of Tails Linux is such that it runs off an external USB drive. Each time after you finish using bitcoin wallet via laptop, turn it off, unplug it, and detach the battery. This generates a new, anonymous session for next time that prevents trackers from hindering your privacy. Electrum is an excellent bitcoin wallet that comes preinstalled on Tails Linux.
Step 2: Buy Bitcoins Personally
For buying bitcoins anonymously, use Tor internet browser, which comes preinstalled on Tails Linux. search for bitcoin sellers. Generate a temporary email ID and use it as an email address to register. Don’t use your real email account to register.
Meet the seller in person and pay with cash. With just a click in your bitcoin wallet, you can generate a receiving address which the seller can scan or enter in the wallet to do the transfer. Do not share your personal details while the multiple transactions confirmations take place.
Step 3: Bury Your Trail with a Bitcoin Mixer
To obscure the transactions of your funds some websites give a “mixing” service for bitcoin. They grant you different bitcoin (which have no relevance to your older transactions. It is similar to exchanging cash with a different serial number. Mixing service will usually send the “clean” coins back in multiple transactions over a period of time to make the transaction record harder to track.
While these services can be beneficial to maintain anonymity yet it is better to take precautions. For instance, test the services by transacting small amounts before risking a large like using an established service, and test it with a small amount of currency before risking a large quantity. In addition, bitcoins mixers may shut down anytime or their services may change from time to time. With bitcoin wallet, you are the controller of your own currency yet use this power.