Is Bitcoin (BTC) really an anonymous cryptocurrency as many people believe? Nope ! Let’s see this in detail in this content.
“Bitcoin (BTC) is an anonymous currency that allows payment on the dark web”. This is one of the favorite phrases of people who criticize BTC for being anonymous. Yes, even Bitcoin (BTC), the king of cryptocurrencies, is not without criticism. It is accused of facilitating the activity of terrorists and money launderers.. For good reason, it would be anonymous. But is this the case? Not really, and that’s what we’re going to show you.
Why is Bitcoin (BTC) said to be anonymous?
If many people believe that BTC is an anonymous digital currency, it is firstly because it can be mined by anyone at any time. Without providing his personal address (or the registered office of his company), hisor other personal information, anyone can mine BTC. To sum up, it is as if all the miners worked behind a dark room covered with a black and very opaque veil.
Furthermore, a BTC wallet can be downloaded without providing (once again) any personal information about the user. It is even possible to transfer tokens to other wallets securely, without revealing your identity. Result: Bitcoins (BTC) that are mined are truly anonymous.
So, in theory, Bitcoin (BTC) is aanonymous. But that’s only in theory! In fact, the reality is quite different, due to the presence of the financial market police, or in more classic terms “the financial”. They set standards that relate to digital assets, and Bitcoin (BTC) is no exception.
No, Bitcoin (BTC) is not anonymous
In truth, theis far from anonymous. Indeed, if this were the case, it would not be possible to trace the transactions. Explanations.
With theof BTC, all transactions are listed. Obviously, in the data that is saved, neither the name nor the first name of the minor appears. What appears in the blockchain is rather a sequence of numbers that correspond to the public address of his wallet. So, if the miner uses the same address each time for these transactions, these transactions will be listed and it will be possible to trace back to the owner of the address.
But how can a string of numbers lead to the owner? It’s simple. It is already enough to know that tokens do not appear by magic in a wallet. They necessarily enter it because another miner sent them, via an exchange (a cryptocurrency exchange). However, all exchanges are required to identify their customers in accordance with Know Your Consumer (KYC) principles.
If you have a wallet, your information is held by your stock exchange. If requested by an authority, the exchange could provide them with your information or send them your IP address which approximates your location. So, no, Bitcoin (BTC) is not as anonymous as we think, and the examples that demonstrate it are legion.
Slik Road, the most notable example
We are in 2008, the golden age of Bitcoin (BTC). It has just appeared and few people hear about it. For the few people who are aware of its existence, the description given is always the same: “It is a currency that does not require any trusted third party and it is regulated neither by States nor by other authorities. It is efficient and allows cross-border exchanges”. Because it is unchecked, crypto is beginning to seduce.
A few years later, an e-commerce site was launched. However, this is not a site like the others. First, it is available on the. Then, it only offers for sale products that are not very Catholic. Its name is Silk Road, an invention of . DPR decides that transactions will be made only with Bitcoin (BTC).
Unfortunately for DPR, a few years later he will be nabbed by the FBI in 2013 who were able to trace him from BTC transactions. FBI agents infiltrate among the buyers of products on the platform. At the same time, they discover an unmasked IP address that leads them directly tobased in Iceland. Thanks to this address, they trace the transactions on the BTC blockchain and go back to DPR.
The end of the story is this: the FBI arrests DPR and gets their hands on a stockpile of over 26,000 BTC which will then be auctioned off. Now here is the moral: never believe that Bitcoin (BTC) transactions cannot be traced. That said, it is still possible to remain anonymous with the king of cryptocurrencies.
How to maintain anonymity with Bitcoin (BTC)?
There are a multitude of techniques to anonymize BTC. One of the most effective is to use blender services. The goal is to mix the BTC of several users. In this way, it is difficult, if not impossible, to identify the exact provenance of the tokens.
Although mixing is a proven method, it has a flaw. For the user, it is essential to trust a third party to entrust him with the funds. Another problem: your transactions can be mixed with those of people who do less legal activities. In the end, you might find yourself embroiled in stories you know neither the head nor the tail of.
In short, is Bitcoin (BTC) anonymous? No and no! The first no is to say that in truth it is only its design that allows it to wear a sheet of anonymity. The second no is more obvious, because it means that the transactions are not really carried out in secret. They can be traced using the Bitcoin (BTC) blockchain.