You can also be tracked digitally in a variety of ways, but to cut a long story short, there are some ways to make Bitcoin anonymous.
A few examples are mentioned below:
1. The Bitcoin mixing process
A public ledger is used to record Bitcoin transactions. Any person who can trace a public address can find out where it originated and/or ended. The anonymization of Bitcoins is not possible at the protocol level, which is why Bitcoin mixers are needed to hide identity.
In Bitcoin mixing, the linkability or confidentiality between coins is broken.
Mixing involves either creating temporary addresses or swapping coins with other addresses of equal value to break the link between Bitcoin addresses. As a result, the trail on the blockchain is difficult to follow.
2. To stay confidential, use Tor-Onion Router
Connecting to the Bitcoin network is possible using the Tor browser. Anonymity and the freedom to use the Internet without surveillance is the goal of the Tor volunteer community. Brave browser is the best choice if you want something fancy. There’s an inbuilt Tor feature and it’s free.
The Tor network encrypts and routes your internet traffic to random nodes on the network before it reaches its destination. As a result, pinpointing the IP address or system from where the message or transaction originated becomes extremely difficult.
3. Install a VPN that is logless
Logless VPNs don’t store information about your activities on their servers. Before arriving at the final destination, your Internet traffic is encrypted and routed through several servers of your choice.
Additionally, some logless VPNs allow multiple users to share an IP address, making it difficult to identify one person’s identity.
Another way to ensure your Bitcoin transactions remain private is to connect to your Bitcoin client through a lossless VPN service. You will need to trust that your activities are not being logged by the VPN service provider in this case.
4. Transactions should always be sent to the new address
HD wallets are most commonly used for Bitcoin. Therefore, new receiving addresses can be generated every time you receive Bitcoins from anywhere. In some cases, new users are confused when their receiving address changes, as they wonder why.
If you use Bitcoins on a regular basis, it is good practice to ensure anonymity. If this is done, it would be difficult to link more than two transactions to you.
Definitely! Unless you do not care about your own privacy or security, you can use the same email address again.
5. Buying and selling Bitcoins in cash
Dealing in Bitcoin anonymously can also be accomplished through cash-to-cash transactions. A suitable service provider can be selected for this purpose.
6. Connect with JoinMarket
Let’s say you want to play it safe and don’t want to entrust the anonymization of your coins to a centralized website administrator.
JoinMarket is another option.
There is no software or service here; it’s a market. To carry out CoinJoin transactions, market makers and takers together form JoinMarket. Coins are arranged at the appropriate time and place on this market.
Making Bitcoin Transactions Secure
Despite the fact that Bitcoins are not anonymous by design, they can provide you with much privacy if they are used responsibly. This is merely an option for making Bitcoins anonymous. As it is still new, the technology has a ways to go.
Is it possible to observe Bitcoin?
There are two short answers to this question: yes and no. Whether you were anonymous or not at the time of the transaction makes a difference. Use an anonymous Bitcoin wallet, purchase Bitcoin from a non-KYC exchange, and use a VPN to hide your IP address to ensure an anonymous transaction. As long as no one can trace your Bitcoin transactions back to you, you are safe, even if your transactions will be publicly available on the blockchain.