It is safe to make the assumption that, if you are reading this, you already have a little knowledge about Bitcoin and how it works. Hence, in this post, we will be looking at the reasons why it is important that you buy your bitcoins anonymously.
One of the reasons why people want to learn about buying bitcoins anonymously is that they are skeptical about revealing their identity to several bitcoin exchange platforms. Whatever your reasons are, we will show you why it is advisable that you do not disclose your identity when buying bitcoins.
Before that, let’s take a quick look at what buying bitcoins anonymously means.
In a simple answer, Bitcoin is private but it is not anonymous. It is true that most credit cards are less private than Bitcoin. However, Bitcoin is just a little bit more anonymous than cash.
To understand this fully, you will need to know how Bitcoin functions. Every transaction carried out on the Bitcoin network is stored on a ledger that is accessible to everyone. This public ledger is commonly referred to as the blockchain.
There is a vast amount of transaction data inputted and recorded on this blockchain. This data includes the amount paid to purchase the bitcoins, the current Bitcoin balance available, the bitcoin sender’s address, and the bitcoin receiver’s address. All of these pieces of information are within the reach of anyone that is registered on the Bitcoin network. Visit this link for useful reference.
All transactions on the blockchain make use of the bitcoin transaction data recorded from previous transactions conducted on the network. It is also important that you keep in mind that there is nothing secretive about the blockchain. Hence, anyone can have access to all your bitcoin transactions.
It is important to state that only transactions and addresses can be traced to the blockchain. Hence, no one has access to the identity of the person carrying out the transactions. This is the major reason why most people refer to bitcoin as pseudo-anonymous.
The most crucial reason why you need to stay anonymous on the blockchain is that you do not want to become a potential hack target. You also do not want anyone tracing your address, right? All you need to do to curb such actions is to simply raise your privacy level.
Blockchain is almost immune from fraud or counterfeiting. This is because it is established on cryptography that is rock-solid. However, the weakest link on any network is always the humans involved.
Your IP address is also broadcasted on the blockchain and this makes it easy for people, who know how, to link it with your real address. The amount of bitcoin you own, the amount of bitcoin you just received, the person that sent the bitcoin to you, and where you send the bitcoin to can all be accessed from your IP address. A potential way to curb this is by using a VPN which will mask your true IP.
In conclusion, it is highly recommended that you carry out your bitcoin transactions anonymously to avoid being hacked.
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