Tuesday, April 23, 2019

Can Bitcoin Be Traced?

When the word Bitcoin is mentioned, the first thing that comes to one’s mind is decentralization. Bitcoin grants anonymity to its users and helps protect their personal information from being leaked, no wonder a lot of people have adopted this digital currency. But there is a revelation that has been made about Bitcoin and many people will not like it; Bitcoin is not hundred percent anonymous. This might come as a surprise to you, but it is true. Web merchants tend to leak information connected to transactions which makes it easier to tie individuals to what they purchased.

How Anonymous Is Bitcoin?

When Bitcoin (BTC) was introduced, people were promised a technology that will protect their identity during transactions, which means that your business deals cannot be traced back to you.

Security experts refer to this as pseudonymous privacy. This type of privacy can be maintained only if the assumed pseudonym has no established link, but once a connection is established, the identity of the user can be obtained. This is a cause for concern for those desiring to conduct anonymous transactions with Bitcoin.

Can Bitcoin Transactions Show Personal Data?

Experts have the opinion that during ordinary transactions, details of individuals are disclosed, and that makes it more possible to trace the individuals to their purchases, even though privacy features are employed in the transaction process. The Web trackers and cookies found on websites are responsible for this.

Can Bitcoin Be Traced?

These Web trackers and cookies send the Internet behaviors of users such as their likes and dislikes, purchase amount, etc., to big internet companies and sometimes they may include your name, address and other information that can narrow down your identity. As a result, the information of online users find their way into the hands of government agencies as well as malicious users who can use the data any way they please.

For this information leak to affect Bitcoin transactions, all personal information of the user such as email, name, etc. has to be provided to make a connection to the Bitcoin address of the user.

How Personal Data Is Disclosed

When the purchase process on a merchant website is still ongoing, Web trackers release information from the site. This leak usually comes from payment information of individuals which are then sent to third-party agents. Most times, these information disclosure is done on purpose for advertising and market analysis. On some trading sites, information about blockchain transactions is exposed to trackers. Though the amount exchanged during the trade remains hidden, a trace could still be done if the time of purchase is provided.

Some apps or services have been created to make it harder to trace Bitcoin transactions by enabling users to secure their personal information even as they make payments. Some other channels of covering one’s tracks exist such as Ghostery and AdBlock Plus, but they are not entirely secure. Most people relying on the anonymity of Bitcoin might find this news depressing, but if their reason for using Bitcoin is devoid of criminality, then there should be no cause for alarm.

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