A bank account must be associated with a real identity, but Bitcoin takes this out of the equation, allowing you to create as many accounts as you want under diverse pseudonyms.
With great power, though, comes great responsibility too. Since you would be managing your fund yourself without the intervention or facilitation by financial institutions, the responsibility of keeping it safe is entirely on your shoulders.
Bitcoin Protects Privacy to Empower Great Causes:
A lot of people are not able to express themselves freely because their identities are linked to their accounts – online or otherwise. Bitcoin rivals the traditional banking system model to take this out of the way. In the financial aspect of life, at least.
But WHY would someone want to hide their tracks? Before you assume, consider these use cases for a moment: a political dissident could store funds without the fear of having their account frozen; an abuse victim could securely stash funds away for when they are ready to flee their current situation; a protest could be funded anonymously to bring positive social change. Not all secret financial activities are ill-motivated.
This model returns the power into the hands of those who deserve it. Bitcoin empowers the oppressed to rise, albeit only discreetly.
Bitcoin might be synonymous with financial privacy, but how much faith do you have in its ability to keep your identity and transactions private while maintaining a high degree of security?
Where it Could Fail:
As much as bitcoin is maintained on the principles of privacy, there is yet another consideration which many users overlook: transparency.
Being a decentralized network, all transactions made with cryptocurrency ends up on a central ledger known as the blockchain. This blockchain ledger is visible to everyone.
Running multiple transactions with the same wallet ID would thus be equal to giving everyone with the ID a hint into just how much you own. We don’t know about you, but that just about puts a big, red dot on your back… from hackers and scammers alike.
As transparent as the blockchain is, though, this wallet address gives no information about you. It neither reveals your identity nor gives off your IP address. You are still anonymous, in a large part, but you could have become a target.
Keeping the Snoops at Bay:
You can see that the diverse ways through which bitcoin protects your identity can be faulted with the transparent model of the service too. Importance should, therefore, be placed on ensuring extra protection is put in place so that this feature doesn’t work against you.
Personally, we advise that you start by securing all your communications. Make sure you use end-to-end encryption when discussing your bitcoin wallet details with people. Likewise, ensure you only engage in such discussions with trusted people, making sure not to reveal your account details in the process too.
One of the most recommended things to do is set up a VPN. That would be the ideal way to throw anyone snooping around on you off your real trail. In fact, they would not even be able to access packs of your internet data at all.
Speaking of accessing your data, it is time to start securing your browsing better. Ensure you only visit safe sites (use HTTPs Everywhere, if that helps) and stay away from sites that are possibly harvesting your data. Browser fingerprinting is a thing – avoid it!
Accessing your wallets via a Tor browser will also do you a lot of good. Yes, wallets, because we believe you should have more than one for holding your funds. Make sure you keep everything airtight too!
This article was originally published at TechWarn.com