Cryptocurrency is a digital form of currency that uses cryptography to enhance its security and provide anonymity when conducting transactions. It’s convenient, fast and inexpensive to use – but really how private are crypto transactions?

Your Anonymity is of Importance

Crypto transactions aren’t really anonymous. In fact, they can be traced back to the individual by using data analysis through blockchains.

Crypto transactions are often promoted as “private” or “anonymous,” but that’s not the case. Although they provide privacy by making it harder to identify you by name, they do not prevent anyone from tracking your transaction history. Even if you use a wallet designed to hide blockchain activity, it may not be truly anonymous.

How Can Cryptocurrencies Be Tracked?

Cryptocurrency transactions are not really anonymous. Although some people think of cryptocurrency as a form of “digital cash”, it’s not like taking out cash from an ATM machine. Cryptocurrencies need third-party services to move from one address to another. In these cases, it is possible to track down the source and destination of a transaction with proper tools and techniques.

Bitcoin trackers let you map transactions on the blockchain, determining what addresses were involved in a transaction and how much was transferred. There are similar trackers for Ethereum and other cryptocurrencies.

Governments are increasingly making use of these tools to track crypto transactions, proving more than ever that despite its reputation for being an anonymous way to conduct transactions, Bitcoin isn’t a foolproof method for avoiding detection.

Does That Mean It’s Easy To Track Bitcoin Transactions?

No, it’s not an easy process. Even though you can easily find the addresses involved in a transaction, that address is usually attached to a pseudonym that doesn’t identify the holder of a Bitcoin wallet. It’s often necessary to backtrack from the receiver to determine the destination of the real currency that was exchanged. The process is difficult and laborious, but it can be done – particularly by the government.

Is There Any Way To Make Bitcoin Transactions More Anonymous?

Yes, although the methods aren’t perfect. Bitcoin mixers combine transactions in a “pool” from many different users, making it more confusing to determine exactly who was involved in the crypto exchange. And some people hold a large number of crypto wallets and move Bitcoins between them in a sort of “shell game” to make tracking much more difficult.

The bottom line, though, is that Bitcoin isn’t as “anonymous” as some of its proponents claim.

The BTC Mester