Cryptocurrency analyst. Founder and editor at btcpeers.com
Bitcoin is now worth over $8,500. As such, it is only natural that this community-driven alternative to banks has drawn interest from traders, investors, and even regulators. Governments are concerned about Bitcoin, sprouting blockchain networks, and how it could impact their operations. Here, it is important to note that the control of money supply is vital for a centralized economy to thrive.
However, Bitcoin and banks (and governments) have opposing principles. One of Bitcoin’s main value propositions is the absence of mediation. That is, there are no central bankers to determine the amount of money to be printed. Instead, processes are autonomous and controlled by cryptography. Backing this network is a distributed and decentralized web that is censorship-resistant.
Therefore, a combination of decentralization, full control, and the allure for transacting anonymously without fear of shadows is what makes crypto and Bitcoin valuable, drawing its own army of determined soldiers.
The potent nature of Bitcoin - and its destabilizing capability, means entry and exit from the crypto ecosystem are heavily monitored. But surveillance is extended, sometimes into the Bitcoin network.
This is because, despite what’s largely expected, Bitcoin transactions are executed via a transparent blockchain exposing transactions to firms, governments, and individuals who devote their time to expose the true, real-world identities of individuals concealed behind cryptography.
Governments or monitoring firms can as such not only link a Bitcoin transaction to an individual regardless of cryptography but in case of lapses further connect them to a home address and identity.
Even though monitoring can be good or bad depending on the trigger, violation of privacy in the name of surveillance can lead to abuse. It is therefore imperative for crypto holders and those who transact in semi-privacy proof coins like Bitcoin to leverage tools or incorporate habits that shield them from unwarranted online tracking.
Towards this end, there are several tips that have been advocated by the crypto community to wade off or make trackers’ covert operation futile.
Before delving deeper, the first thing you can do to protect your anonymity is to avoid shelling out personal information when exchanging coins. This means, a trader should avoid linking personal or organization’s information to a cryptocurrency address. To do this, when transacting, don’t use the same crypto address over and over again. It is recommended that an address should be used only once.
If used more than once, the user can be de-anonymized through what is called a Taint Analysis. By using different addresses when transacting, it becomes difficult to evaluate and identify relationships between transactions.
Second, use an up-to-date antivirus, conceal the IP address of your computer, and clear cookies which can store personal details. Bitcoins are digital in nature and without basic protection, it is easy for hackers and contracted firms to track your web prints. This means they can not only lift some of your personal, identifying information via cookies/caches, but also track your BTC transactions. Coupled with an unexposed IP address, it becomes easy work to de-anonymize a trader.
Third, do your due diligence when selecting a cryptocurrency exchange. Since regulators have their way and have a firm grip on centralized ramps like Coinbase, a trader should opt for decentralized exchanges which are non-custodial or a peer-to-peer (P2P) platform like Bitzlato to transact and trade. Increasingly, more traders, especially in emerging economies, prefer P2P platforms thanks to their benefits.
Using this example we can see what you need to look for. Bitzlato is a P2P platform that enables crypto-for-fiat exchanges or fiat-for-crypto purchases without the need of divulging the identities of the participants. In this platform, Know-Your-Customer (KYC) rules don’t apply and traders can cheaply and securely transact since there is a transaction protection system in place.
For fiat purchases or liquidation, traders have access to payment and banking systems from 28 countries. After onboarding, users can use the same P2P account to swap their purchased crypto with other coins like Dash, Bitcoin Cash, USDT, and Ethereum (ETH).
Fourth, use virtual private networks (VPN) which incorporate secure protocols as PPTP or OpenVPN which conceals online transactions, or the Tor browser—a free software that masks the IP address of the user. These services safeguards the user and actively keeps them anonymous when browsing the internet. And they are time and battle-tested. They are used by researchers, journalists, and users who are concerned by corporations’ blatant breach of privacy and witty demand for de-anonymity.
Tor and VPNs protect the personal identity of the user by hiding their IP addresses, web activity, and their locations. And they are even configurable meaning a user can change their IP and locations whenever they wish.
Fifth, to keep low, don’t let everybody know how much Sats you stack. Just stop talking about your Bitcoin wealth. Most of the time, the other party doesn't care. Keep it hush hush. After all, it won’t take a big tip from the internal service revenue for them to start snooping.
Disclosure: I am using Bitzlato platform, and hodl a small amount of their native currency. BTC is a part of my investment portfolio.