Bitcoin presents an unprecedented transparency level in the financial world. Every Bitcoin transaction is public, permanent in the Bitcoin network, and traceable. Only the crypto wallet’s address defines where Bitcoins go. However, the history of the other transactions taints Bitcoin addresses after their use.
On the other hand, anybody can see all transactions and the balance of a Bitcoin address. Because Bitcoin users reveal their identities to receive goods and services, their wallet addresses can’t remain fully anonymous. Since the blockchain is permanent, anything that may not be traceable now might be trivial to track in the future. Therefore, Bitcoin users should use their crypto addresses once and avoid disclosing them.
Despite this knowledge, some people are unsure whether they should invest in Bitcoin. Some use platforms like bitcoin system to purchase Bitcoin with fiat money. Nevertheless, many people fear that criminals can steal their money if they get their Bitcoin information.
How Somebody Can Get Your Bitcoin Information
If someone knows your unspent transaction, they may also see the number of Bitcoins in your crypto wallet. Here’s how somebody can get your Bitcoin information:
- Suppose you buy Bitcoin on a crypto exchange and request to transfer them to another platform. In that case, the cryptocurrency exchange will know where you move the tokens.
- A person knowing your real-world identity can also get your crypto information if you transfer Bitcoins to them.
- If you order something online using Bitcoin and provide an address and a name to help the company deliver it.
Once you’ve known how people can get your Bitcoin information, please take the necessary steps to avoid disclosing it to malicious people. Ideally, aim to ensure that nobody has information they can use to link you to a Bitcoin wallet or transaction.
How to Protect Your Bitcoin Information
Ideally, Bitcoin transactions lack sufficient privacy. However, you can take several measures to enhance your privacy when using Bitcoin, even if you’re a non-technical user. Here are ways to protect your Bitcoin information.
- Don’t disclose information about the number of Bitcoins in your crypto wallet
- Don’t post your Bitcoin addresses publicly
- Avoid re-using Bitcoin addresses, although most services take care of this automatically
- Keep Bitcoin addresses private using online tools
- If possible, run a full node without requesting information about transactions from other nodes
Like an email, Bitcoin is pseudonymous, meaning it has unique identities, though they might not be the user’s identity. And because Bitcoin isn’t completely anonymous, it can have privacy issues. For instance, if somebody discovers your identity in the Bitcoin network, they can use it against you.
Idealistic people drive Bitcoin’s development. These people believe that society should be open and uphold human rights. That’s why they believe Bitcoin should have better privacy.
Why Bitcoin Information Should be Private
Keeping Bitcoin information private enables users to protect their possessions. Ideally, you own the Bitcoins in your crypto wallet. But this full ownership can also be risky. After transferring Bitcoins to another user, you can’t get them back unless they send them back to you.
Without privacy, people can know the amount you have and acquire them by threatening you or hacking your wallet if they get your keys. That means you could lose your Bitcoins permanently.
Also, keeping Bitcoin information private enables businesses to maintain competition. When running a business that transacts with Bitcoin, all outgoing and incoming transactions would be available to your competitors. And this would disadvantage your enterprise. Perhaps, such information would disclose your suppliers and the deals they offer you. Therefore, Bitcoin information should remain confidential for individuals and organizations.
