For some, it still be surprising, but the truth is that Bitcoin is not anonymous at all. Therefore, it’s important for us to answer the frequently asked question, “How to use Bitcoin anonymously?” The anonymity of Bitcoin transactions and payments can be approached from various angles, but this article will explain how to anonymise Bitcoin payments with a few simple tips and techniques.
How to increase the anonymity of Bitcoin transactions
There are various methods that without too much effort anyone can use to strengthen the anonymity of Bitcoin payments. The first two tips will discuss digital privacy in general, and further tips will entirely focus on anonymity of Bitcoin transactions. However, the highest level of anonymity can be achieved by combining these approaches together.
1. The Onion Router, or Tor
The usage of the Tor browser is our first tip for ensuring more anonymous Bitcoin transactions and enhancing a user’s overall online privacy. Thanks to the Onion Router (Tor), your internet traffic is encrypted and rerouted through the series of random Tor network nodes. As a result, it is extremely difficult to disclose the broadcaster’s IP address, making the transactions themselves very anonymous.
2. VPN – Virtual Private Network
When it comes to strengthening the anonymity of Bitcoin transactions, employing VPNs and Tor are quite similar approaches. Although none of these tools specifically relate to Bitcoin, the overall increase in anonymity can immediately strengthen the anonymity of any Bitcoin transaction. A virtual private network (VPN) known as an anonymous VPN does not keep track of user activity on its servers. Its primary function is to encrypt online communication and redirect it through multiple proxy servers across various geographical locations, before it reaches its destination. This indicates that a VPN essentially masks the user’s IP address, much like CoinJoins masks Bitcoin transactions. However, some VPNs also enhance the device’s security by scanning for viruses, which provides another reason for using one. If someone wishes to accept a Bitcoin transaction anonymously, improved privacy and security are unquestionably strong reasons to utilize a VPN.
3. New wallet addresses
Never re-use any addresses if you wish to accept Bitcoin in the most anonymous manner. The majority of cryptocurrency wallets automatically create new addresses for each transaction. This makes it much harder to link a user’s identity to a specific transaction, especially if the wallet has not gone through a KYC procedure. Before anyone attempts to further increase the privacy of Bitcoin payments, this is the absolute minimum that must be done.
4. Lightning Network for small transactions
Another excellent technique to increase the anonymity of Bitcoin payments for both the sender and the recipient is through the Lightning Network. Due to the fact that LN wallets don’t require a KYC and that transactions aren’t recorded on the block-chain, this off-chain layer-2 solution enables users to ensure that their transactions are untraceable. Just make sure that your wallet supports the Lightning Network, since Bitcoin transactions and Lightning transactions are two different things. The Lightning Network is becoming more and more popular, especially for smaller transactions, which are typically in the range of a few dollars. LN provides a very interesting option for anonymous Bitcoin payments.
5. Bitcoin mixers or tumblers
The use of tools like CoinJoins, Bitcoin mixers, or Bitcoin tumbling services is our next tip or trick to increase the anonymity of Bitcoin transactions, mostly for the receiver. These services basically hide the transactions’ true identities in order to increase their anonymity. It’s done by pooling a number of transactions, which are “shuffled” and randomly distributed to the receiving addresses. By doing this, it becomes very hard for any Bitcoin or block-chain tracking company or government institution to track who sends money to whom.
6. Send Bitcoin privately with Wire
If none of the above-mentioned tips appeal to you, there is a very easy way to assure that your Bitcoin payments will stay anonymous. And that’s the Whir.to service.
Whir is a service that prioritizes privacy and uses CoinJoin directly on its website to support anonymous Bitcoin transactions. Whir is extremely simple to use and all you need to do is add the recipient Bitcoin address and the amount you want to send. Then send the amount to the address generated by Whir, which ensures that the transaction reaches the recipient in total anonymity. Sending Bitcoin anonymously with Whir is extremely easy.
Conclusion: How to accept Bitcoin anonymously might be a complex topic with numerous layers. However, this article attempted to offer some helpful tips for individuals who wish to increase their privacy both in the digital and Bitcoin worlds. Most of these tips are not that complicated, which is why we suggest combining them. No matter if you use the Bitcoin mixer or the Whir service, always make sure that you are running Tor browser or at least use some anonymous VPN, and always generate a new wallet.