Since 2009, Bitcoin has become one of the most popular forms of cryptocurrency on the market. It came on the scene as a push toward digital currency began, offering consumers ways to freely manage their money. In 2017, Bitcoin saw newfound popularity as a way to cut out the middleman and offer a more accessible market. And while there are many benefits to utilizing cryptocurrency, there are still some concerns around safety. One of the most commonly asked questions surrounding the payment method is users wondering, “Is Bitcoin anonymous?” Below, we’ll help you answer that question and teach you more about cryptocurrency transactions.
Is Bitcoin Anonymous?
Anonymity is brought up frequently in cryptocurrency spaces, and there is a lot to discuss on the topic. The transactions that take place on the blockchain using Bitcoin are not truly anonymous. In truth, they are more along the lines of “pseudonymous”. Like the idea of writing under a pseudonym, this means that something’s true identity is behind another name. Similarly, blockchain transactions are encrypted, masking the identity of the wallet owner from the other person in the exchange.
There is a level of protection that this encryption provides, but there is a catch. Though the other party in the transaction may not be able to obtain certain information, it still goes on the record. This means that every exchange that has ever taken place on a blockchain or crypto marketplace has been tracked. As a result, Bitcoin transactions can never be truly anonymous.
But why is anonymity so important? Should it be a concern? If you value the safety of your data, you may be asking yourself these questions. Let’s explore some of the different ways that these transactions can pose potential security risks so you can plan ahead for the safety of your wallet and personal information.
Crypto Wallet Safety Risks
Much of the structure of the blockchain is built on the idea of securing personal transactions, but there are still risks and challenges. Because your cryptocurrency purchases are made through accounts that contain your identifying information, if your account were to become compromised then you could lose access to more than just your Bitcoin wallet. Cybercriminals could use the data they obtain from your account to steal your identity and more.
If you’re a cryptocurrency user, then you’re no stranger to the fact that data breaches and security leaks are fairly common. When these leaks occur, it means that the information attached to crypto accounts becomes public and accessible to third parties. These third parties can obtain that data and take advantage of it for their own purposes. When it comes to protecting your Bitcoin account from these cybercriminals, it’s important to be diligent.
Ultimately, your cryptocurrency is only as safe as you make it. However, there are some notable safety risks that you can avoid by learning about them. Take a look at the following crypto wallet safety risks and learn more about keeping your Bitcoin safe.
Protecting Your Bitcoin and Crypto Wallet
We all know the old saying: anything you post on the Internet is there forever. This includes bitcoin transactions. But what does this mean for your security? As we discussed, having an anonymous online wallet is next to impossible. You can only achieve Internet anonymity by not tying any personal information to an account. You may already be aware that your online crypto wallet requires personal information to verify your identity. This is where the risks of Bitcoin really come into focus.
One way to protect yourself on the Internet is by reducing the number of platforms that have access to your personal information. This makes it more challenging for criminals to use the information they may obtain against you.
Another way for you to protect your Bitcoin and crypto wallet is to use a VPN. With a VPN, you can mask your IP address and hide your personal information from prying eyes. Anyone tracking your activity or data will be unable to see your true location after you redirect it through another server. This is why using a reliable VPN is a great way to protect your crypto transactions.
Do I Need a VPN for Cryptocurrency Transactions?
Blockchain transactions are not anonymous but “pseudonymous,” as we previously mentioned. After financial activity goes through a KYC/AML verification, it becomes easier to track. Each transaction leaves behind an IP footprint at the crypto exchange where it happened. This is one of the main reasons why a VPN is such a valuable tool for your crypto wallet. Using a VPN gives you more control over the privacy and safety of your cryptocurrency transactions.
Using a VPN with your cryptocurrency transactions helps you know that your data is safe. A VPN provides additional layers of protection for your crypto exchanges, plus other privacy features. You can save yourself time and money by getting a reliable VPN for your phone, computer, and even your network router. When you have total control over your privacy, you can feel even more secure while making Bitcoin transactions and other cryptocurrency exchanges.
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