Is Bitcoin (BTC) anonymous?

“Bitcoin (BTC) is an anonymous currency that allows you to pay on the dark web “. This is one of the favorite phrases of people who criticize BTC for being anonymous. Yes, even Bitcoin (BTC), the king of cryptocurrencies, is not without its critics. He is accused of promoting the activity of terrorists and people who launder money.money. For good reason, it would be anonymous. But is this the case? Not really, and that’s what we’ll show you.

Why is Bitcoin (BTC) said to be anonymous?

While a lot of people think of BTC as a currency digital anonymous, it is primarily because it can be undermined by anyone at any time. Without providing their home address (or company headquarters), IP address, or other personal information, anyone can mine for BTC. To sum up, it is as if all the miners were working behind a dark room covered with a black veil and very opaque.

Moreover, a wallet BTC can be downloaded without providing (once again) personal user information. It is even possible to transfer tokens to other wallets securely, without revealing their identity. Result: Bitcoins (BTC) that are mined are truly anonymous.

So, in theory, Bitcoin (BTC) is a cryptomonnaie anonymous. But that is only in theory! In fact, the reality is quite different, due to the presence of financial market policemen, or in more classic terms “the regulators financial ”. They set standards that relate to digital assets, and Bitcoin (BTC) is no exception.

No, Bitcoin (BTC) is not anonymous

In truth, the Bitcoin (BTC) is far from anonymous. Indeed, if this were the case, it would not be possible to trace the transactions. Explanations.

With the BTC blockchain, all transactions are listed. Obviously, in the data that is saved, neither the name nor the first name of the minor appears. What appears in the blockchain is rather a series of numbers that correspond to the public address of its wallet. So if the miner uses the same address each time for these transactions, they will be listed and it will be possible to trace back to the owner of the address.

But how can a string of numbers lead to the owner? It’s simple. It is already enough to know that tokens do not appear by magic in a wallet. They necessarily enter because another miner sent them, via an exchange (a cryptocurrency exchange). However, all stock exchanges have the obligation to identify their customers in accordance with the principles of Know Your Consumer (KYC).

If you have a wallet, your information is withheld from your stock exchange. If an authority requests it, the stock exchange could provide it with your information or send it your IP address which approximates your position. So, no, Bitcoin (BTC) is not as anonymous as you might think, and there are plenty of examples to demonstrate this.

Slik Road, the most remarkable example

We are in 2008, the golden age of Bitcoin (BTC). It has just appeared and few people hear about it. For the few people who know of its existence, the description given is always the same: “It is a currency that does not require any trusted third party and it is not regulated by the States or by other authorities. It is efficient and allows cross-border exchanges ”. Because it is not controlled, the crypto begins to seduce.

A few years later, an e-commerce site was launched. However, this is not a site like any other. First, it is available on the dark web. Then, he only offers for sale products that are not very Catholic. Its name is Silk Road, an invention of Dread Pirate Roberts (DPR). DPR decides that transactions will be done only with Bitcoin (BTC).

Unfortunately for DPR, a few years later he will be pinched by the FBI in 2013 who were able to trace it back to him from BTC transactions. FBI agents infiltrate buyers of products on the platform. At the same time, they discover an unmasked IP address which leads them directly to servers based in Iceland. Thanks to this address, they trace transactions on the BTC blockchain and trace them back to DPR.

The end of the story is this: The FBI stops DPR and gets hold of a stock of over 26,000 BTC which will then be auctioned. Now the morality here is it: never believe that Bitcoin (BTC) transactions cannot be traced. That said, it is still possible to remain anonymous with the king of cryptocurrencies.

How to maintain anonymity with Bitcoin (BTC)?

There are a multitude of techniques to anonymize BTC. One of the most effective is to use the services of blenders. The goal is to mix the BTCs of several users. In this way, it is difficult, if not impossible, to identify the exact provenance of the tokens.

Although mixing is a proven method, it has a flaw. For the user, it is essential to trust a third party to entrust him with the funds. Another problem is that your transactions can get mixed up with those of people who do less legal activities. In the end, you might find yourself getting involved in stories whose head and tail you don’t know.

In short, is Bitcoin (BTC) anonymous? No and no! The first no, it is to say that in truth it is only its conception which allows it to be covered with a sheet of anonymity. The second no is more obvious, because it means that transactions do not really take place in secrecy. They can be traced using the Bitcoin blockchain (BTC).