Is Bitcoin truly anonymous? Many people are curious about this question, both for good and for bad reasons. In the last year, cryptocurrency has been a popular choice for investors, particularly when Bitcoin, Ethereum, and even Dogecoin (meme-based) showed signs of incredible growth.
Bitcoin touched its highest-ever value, crossing a staggering $60,000 price in April 2021. Some still believe that Bitcoin anonymizes transactions, but is it true?
Let’s start by looking at what the largest and oldest cryptocurrency in the world has got to say about anonymity.
On its website, Bitcoin says that all of its transactions are stored publicly and permanently on its network. It states that anyone can view the transactions and balance of any Bitcoin address. The company clarifies, however, that the identity behind an address is not disclosed until it is sent out during a purchase or under other circumstances.
This is also an example of why Bitcoin addresses should be used only once. It states that you are responsible for ensuring your privacy and following good practices.
Ben Weiss was the co-founder of CoinFlip and the COO of CoinFlip. He stated that although many people believe Bitcoin transactions are anonymous or untraceable they simply misunderstand the technology. Weiss stated that the oldest currency in the world was not anonymous and suggested that it could be called pseudo-anonymous.
Why? Weiss explained that you cannot buy large amounts of Bitcoin without KYC, ID or driver’s licences. Transactions are almost impossible if there is no identification check.
According to the 41-year-old entrepreneur, the myth that Bitcoin is anonymous comes from the belief that it is often associated with illegal activity. Therefore, it must be protecting the identity of those trading in it.
‘Bitcoin is actually more transparent in many ways than typical things in the financial system,’ he was quoted by BusinessInsider as saying.
Not only Bitcoin, but even the most private cryptocurrency like Monero, DASH and Verge can be traced to a certain degree. Every transaction is tracked and stored on a ledger. Anyone can see it. The ledger records the amount, time and wallets from which the money was sent or received.
It is simple: you are anonymous until you have not transacted in or traded in cryptocurrency. Once you do this, your wallet will be added to the ledger and thus the record books.