The Bitcoin blockchain is designed in such a way that transactions between accounts are never linked with a person’s name or email address. In addition, blockchain addresses are based on alphanumeric strings, which are publicly recorded. For example, you could Google now for the top-10 bitcoin addresses storing the highest amount of bitcoins but you can’t see who’s the owner of the particular address. Nonetheless, by tracking IP addresses it would actually be possible to track the individual who’s owning a specific bitcoin address.
In a nutshell: bitcoin transactions are not fully anonymous.
While writing this article, the current amount of different coins listed on coinmarketcap is 1519, which is an insane amount of different coins. It’s impossible to mention all the coins in this article, however, there are differences between coins such as Bitcoin or coins that focus heavily on being totally anonymous such as Zcash, Dash, and Monero. On the contrary, these coins try to implement encrypted transactions whereas Bitcoin does not.
Cryptocurrency holders often explore many different ways to improve the anonymity of their transactions and balances. Especially traders who own a lot of coins use offline wallets, multiple accounts, and other e-wallets. However, in some ways this would be a waste of effort if you’re trying to maintain your anonymity because the exchange platforms would be able to cross-reference your IP to specific addresses and transactions.
That’s why everyone in the crypto market should use a VPN (Virtual Private Network) in order to prevent any IP-tracking possibilities that might link the user to a certain address and ultimately secure online privacy. A VPN allows you to execute trades without leaving any IP-trail behind.
How does a VPN protect my privacy?
There are multiple areas a VPN is useful for when dealing with cryptocurrencies. Let’s go over an example list to show you what VPNs do to secure your privacy:
A VPN will automatically encrypt all outgoing data from your device while you are trading in cryptos. This basically means that your data is cut into pieces and does not make sense anymore for someone who tries to steal this data, only the encryption key would.
Another advantage of using a VPN is that government agencies, NSA, or your own internet provider will be unable to identify your crypto e-wallet(s) or look into any transactions you’ve made in the past because it’s impossible for them to link your IP to an address.
3) Buy anonymously
In addition, a VPN also protects your privacy upon buying any coin on any coin trading platform such as Coinbase or Binance. Because at the time of buying a particular coin, the VPN will not reveal your true IP address. Also, it’s very common for VPNs to change IP address and location continuously.
4) VPN configuration
Most VPNs provide options to change the settings and set a configuration that meets your needs. If you only want to protect your cryptocurrency activities, you could simply adjust the settings of the VPN without changing any of your regular internet activities.
On a final note…
Using a VPN does a lot to maintain your privacy, however, be aware when choosing a VPN to check whether it’s storing user logs. Meaning, the VPN basically records your internet activity. Therefore it’s important to obtain a logless VPN that does not keep track of any of your browsing history!
Bill here from
PixelPrivacy.com. My blog is all about making the world of online security accessible to everyone. I pride myself in writing guides that I’m certain even my own mom could read! Be sure to head over to my blog if you’re interested in keeping your private information just that: Private!