A common misconception of Bitcoins, or most cryptocurrencies for that matter,is that they are anonymous.
To learn why cryptocurrencies like Bitcoin are not fully anonymous, we must first learn the basics of how these transactions work.
When sending/receiving Bitcoins, you need a Bitcoin address, a single-use token containing a string of random numbers and letters which looks like this:
You would send Bitcoins to another person’s Bitcoin address the same way you would send an email to someone’s email address.
Because Bitcoin is decentralized and people exchange value without intermediaries, every transaction is always recorded on a public record for all to see. This online ledger is known as the blockchain.
ANYTHING DIGITAL LEAVES A TRAIL……
Under the Bitcoin protocol, when you send coins, the transaction is posted to Bitcoin’s nodes unencrypted and in plain sight. Similarly communication between nodes is also unencrypted. Even anonymity cryptocurrencies such as Dash, Monero, Zcash and Zcoin have yet to implement encrypted node traffic. Anyone monitoring the network such as ISPs can obtain information on where transactions and blocks originate and can link Bitcoin addresses to IP addresses, which can be used to de-anonymize users.
A VPN (virtual private network) can protect your privacy when using cryptocurrencies by:
- Encrypting all outgoing traffic from your computer while you are doing your financial transactions.
- Prevent ISPs, governments or the NSA from looking into your wallet/node traffic and determining your transactions or even wallet balances.
- Allow you to purchase products anonymously (including VPNs) using cryptocurrencies while not revealing your true IP address.
- With our proxe id server configurations, you can selectively choose to route only your wallet traffic through the VPN without affecting your other internet activities.