Most researchers proclaim cryptocurrencies like Bitcoin as private and encrypted. However, in the Threat Landscape Trends report for Q2 2020, US cyber-security vendor Symantec said cryptojacking has spiked by 163% compared to the previous quarters
So are your cryptocurrencies untraceable? The answer is yes, and no. While cryptos like Bitcoin offer better privacy than traditional payment methods involving a third-party intermediary like a credit card provider, it is still not as anonymous as a cash transaction.
As enthusiasts push for the broader adoption of digital assets, anonymity in the crypto space becomes an ever more contentious issue. Governments, banks, and lawmakers are now implementing know-your-customer (KYC) and anti-money laundering (AML) regulations.
Administering KYC and AML is in the best interest of protecting users of cryptocurrency platforms. However, they add another layer of bureaucracy that compromises your ability to stay anonymous when buying and selling cryptocurrency. Despite these privacy issues, there are ways to enhance your privacy in the crypto space.
It’s quite frustrating to think that you leave a trail that could lead back to you whenever you complete a crypto transaction, isn’t it? Well, here are six helpful tips to keep your wallet away from the prying eyes of the internet.
Use the Best Software Wallet
A software wallet is the most common type of Bitcoin wallet which is easy to access and use. Just download the wallet to your desktop or laptop device. The software wallet provides you with a public and private key. You can then transfer Bitcoins in and out of the wallet.
The ideal anonymous wallet shouldn’t ask for your personal information like your name, Email address, phone number, or postal address. Some of the best bitcoin wallets include Ledger Nano X, Bitcoinpaperwallet.com, Samourai wallet, Electrum wallet, and Incognito wallet.
Let’s look at one of the best Bitcoin wallets — Electrum.
Electrum Bitcoin wallet runs on Windows, Mac, and Linux, and you can download it for free. It gives users the ability to determine the level of security they wish to use. For instance, you can form a multi-signature wallet; then, you can also elongate your seed phrase with custom words.
Electrum provides a password seed that allows you to recover your coins if you lose your private key. You are only required to keep both of these safe, and your funds will be secure.
Anonymous software wallet perfect for the more advanced Bitcoin holder who wants excellent security features and customizability, all in a simple layout.
Mix Your Bitcoins Using a Mixer/Tumbler
We’ve all been there; you want to complete a crypto transaction in a rush, so you blindly use the same address you did as the last transaction. Well, you probably shouldn’t because doing so builds a list of transactions that can be associated with the wallet you used. The result? A little forensics digging could lead internet sleuths right to your real-world identity.
Those transactions could easily be associated with a real-world identity with forensics digging. Bitcoin mixer is required to hide identity since there is no protocol-level procedure to anonymize these bitcoins.
Bitcoin mixing is a procedure that tries to break the linkability or traceability. Users are allowed to “mix” their coins with other users in a pool of funds. By doing this, the link between their Bitcoin addresses and their real-life identities is hidden, making it easier for users to complete private transactions.
Using an address severally can make a user be de-anonymized through Taint Analysis. Use different addresses for every single transaction you make. Making unique addresses when transacting is a good practice to ensure anonymity when using Bitcoins regularly. By doing this, it would be hard to link to 2 or more transactions to you.
Sign Up for Cryptocurrency Exchanges without KYC Verification
Withdrawing your money from an exchange with KYC verification is more complicated and time-consuming than sending money. Such platforms often require their customers to submit two or more personal identification pieces, and the submission itself doesn’t guarantee verification.
Exchanges with KYC require clients to identify themselves by verifying documents such as home addresses, phone numbers, Passport, ID, or driver’s licenses. The user’s personal information could be compromised, and the verification interferes with the anonymity of crypto exchanges, which is crucial for many investors.
The best anonymous cryptocurrency exchanges without KYC Verification include; Binance, Kraken, ShapeShift, Changelly, and Bitcoin ATM. These trading platforms are a haven for investors who would instead not give their personal information to trading platforms.
Binance, the world’s largest crypto exchange, is highly reputable if you are looking for a deal without the stringent KYC verification.
It allows you to withdraw around 2 BTC per day with an email address only.
Get a Dedicated PC and a Secure Network
Get a device that is solely dedicated to your cryptocurrency activities to lower the odds of vulnerability. Appliances for surfing and pleasure activities could have viruses and ransomware.
You could, for example, use an OpenVPN, which conceals online transactions. They are commonly used by researchers, journalists, and users who are concerned by corporations’ blatant breach of privacy.
Tor and VPNs also incorporate secure protocols to protect the user’s identity by hiding their IP addresses, web activity, and locations. They are also configurable, meaning a user can change their IP and locations whenever they wish.
Take Advantage of Escrow Services
For P2P transactions, you can’t always be sure of the other party’s identity. So how do you ensure you aren’t being duped? Escrow services come in handy in such situations.
An escrow is a financial service where a third party holds and controls the payment of the funds needed for two parties involved in a particular transaction
Escrow ensures fraud protection for both buyers and sellers all over the globe. At every step of the process, there is a verification of your transaction with proven tracking.
Escrows are handy in the case of a transaction where a considerable amount of money is required and a certain number of obligations need before payment is released
Install an Ad-blocking or Anti-crypto Mining Extension on Your Web Browsers
Most cryptojacking scripts come through web ads; cryptohackers rely on victims to execute the script. Users click on an attachment or link to implement and run the crypto mining script or browse to a website with infected ads.
Installing ad blockers can be an effective means of stopping them as they detect crypto-mining scripts. Ad blockers prevent advertisers from tracking your behavior and keep you anonymous.
The most practical anti-cryptocurrency mining tools that you can download on your PC include No Coin and MinerBlock.
Final Thoughts
Privacy is a craved feature in the virtual world, which is why the most popular digital currencies are those that offer exclusive privacy features. Most crypto investors want to keep their transactions from the reach of third parties such as governments, and criminals after their crypto wallets.
Bitcoin is continuously a target of government agencies despite being the most popular choice for crypto investment. Agencies have become quite good at tracing Bitcoin transactions, creating a strong incentive to switch to more private cryptocurrencies.
Still, hackers are making it harder to spot their efforts. While older scripts maximized CPU use, current crypto mining scripts control about 20 percent, making them undetectable.
Hackers do not need significant technical skills for cryptojacking. According to, The New Gold Rush Cryptocurrencies Are the New Frontier of Fraud, cryptojacking kits are available on the dark web for only $30.
With the preventative steps, you can reduce your exposure and vulnerability to browser-based attacks.
Well, there you have it! 6 proven methods that you can use to maintain your privacy in the crypto world. Which of these methods have you tried before? Let us know in the comments section below. Don’t forget to suggest tips that have worked for you and aren’t included in the article above!
