To answer important questions about the anonymity of Bitcoin (BTC) network transactions and the possibility of tracking them, we need to answer a few questions that we will discuss below.
1- Can Bitcoin transactions be tracked?
Bitcoin transactions can be easily traced through blockchain probes, but making transactions of this cryptocurrency anonymously is considered a difficult process.
It is certainly possible to track transactions made on the Bitcoin network. Bitcoin explorers allow you to track activity on the cryptocurrency’s blockchain. Thanks to this transparency, all transactions are traceable and you can think of the blockchain as a kind of open database where all transactions are recorded.
Other cryptocurrencies, including Ethereum (ETH) and Solana (SOL), have provided their blockchain probes with the names Etherscan and SolScan. You can find all the information related to the blockchain transactions of your desired cryptocurrency by referring to these explorers. The information of each transaction includes the amount of cryptocurrency sent, the address of the sender and recipient, and the date of its registration and confirmation. Despite the high transparency of the blockchain, many people think that you will still be able to record Bitcoin transactions completely anonymously. However, more and more countries are adopting Know Your Customer, or KYC, laws, a process that requires you to register your true identity on centralized trading platforms. Governments can easily do this by exposing your identity, discovering the transactions you have made and seeing how much cryptocurrency is in your digital wallet.
Cointelegraph In order to access trading services on exchanges, you must provide your personal information to that exchange, he writes, and thus Bitcoin addresses can be linked to personal data. Since the data of previous Bitcoin transactions are not deleted, it is always possible to view them.
2- Why is Bitcoin traceable?
Bitcoin transactions are traceable because the cryptocurrency’s blockchain is completely transparent and every transaction on it is publicly stored in a distributed ledger. Since 2013, various studies have sought to trace Bitcoin transactions and their associated identities. Although it is possible to create a certain form of anonymity with cryptocurrencies, it is difficult to send transactions completely anonymously through the cryptocurrency’s blockchain. In fact, blockchains are completely open and available to everyone.
Thanks to the very high transparency of blockchain, money flows can be easily traced on it. If the identity behind the wallet address is known, the transactions made through that address can be monitored in the future. In fact, it is possible to view the details of all Bitcoin deposits and receipts for each wallet on this network. Therefore, in addition to the possibility of viewing the amounts sent and received, the date and address of the destination wallet can also be viewed.
3- How are Bitcoin transactions tracked?
With increased regulation and oversight, governments can more easily track fraudulent Bitcoin transactions by finding the identity behind the wallet address. In recent years, millions of dollars of digital currency have been seized by various governments around the world. Criminals have well understood the opportunities provided by blockchain technology and try to buy and sell cryptocurrencies, especially Bitcoin, as anonymously as possible.
Finally, blockchain has not been a very good solution for many fraudsters and it can be said that the transactions of this cryptocurrency are not completely anonymous. These events have helped to tighten the laws in this field as well as increase the search for fraudulent transactions.
When transacting through anonymous Bitcoin wallets, transactions can be traced quickly, but discovering the identity of the wallet’s owner is likely to take time. When someone wants to exchange their cryptocurrencies for US dollars, it becomes much easier to trace the identity of the owner of the wallet and the transactions related to it.
4- Is it possible to search the Bitcoin wallet address?
It is possible to search the Bitcoin wallet address through the browser of this cryptocurrency; However, finding an encrypted address does not mean you know the real identity behind it.
When you don’t have access to any of the identifying information associated with a Bitcoin wallet, it becomes more difficult to trace. It is easier to find transactions and addresses through a blockchain explorer, but it will take more time to find the identity behind each wallet.
Since the personal wallet address should not be anonymous, it is difficult to find it. A Bitcoin wallet address is called an alias, and this name is certainly different from the real name of its owner. The data does not refer to the person’s identity, but it is still possible to trace a person’s identity or alias.
5- What are the challenges of tracking a Bitcoin address?
Tracking Bitcoin transactions is likely to be more difficult when people use different wallets and Bitcoin mixers. These factors disrupt the search process and it takes a lot of time to go through them.
Despite the fact that Bitcoin wallets are challenging for users to make transactions completely anonymously, there are various ways to approach anonymity. For example, it is possible to use cryptocurrency mixers to increase the level of anonymity in transactions.
A Bitcoin mixer ensures that its transactions are harder to trace. This is done by combining Bitcoin transactions from different people into a pool, and then the transactions will be sent to the desired addresses.
Additionally, wallets can also be very difficult to monitor. If someone doesn’t want their activities to be tracked on the Bitcoin network, they can use some kind of interference screen. In this method, by creating many encrypted wallets and performing various transactions among these wallets, tracking transactions and wallets will become more difficult.
Both of the mentioned methods, by themselves, make the process of tracking Bitcoin transactions more difficult, but their combination can be very challenging for tracking the addresses of this cryptocurrency, and in this situation, identifying transactions and wallets requires a lot of time and energy.
6- Is it possible to have an anonymous bitcoin wallet?
Currently, there are various anonymous wallets for Bitcoin, but you should be very careful when using them, because in some cases it can lead to revealing your identity, which is against the main purpose of an anonymous wallet.
As mentioned, it is possible to use an anonymous Bitcoin wallet, however, these types of wallets alone are not sufficient to ensure anonymity. When a person makes multiple transactions, an identity can be linked to a wallet that contains this information. Due to the strict KYC rules for exchanges, making transactions completely anonymous seems to be a very challenging issue.
However, there are wallets for Bitcoin that allow you to operate completely anonymously. Electrum is an example of this type of tool that can also be integrated with a hardware wallet. Before choosing to use an anonymous wallet, it is better to first consider how bitcoins enter that wallet. When Bitcoin is sent from a KYC exchange, the recipient’s anonymity is already lost.
7- Is it possible to share your bitcoin address publicly?
It’s okay to share public keys, but make sure that your wallet’s private key remains completely secret and not accessible to anyone but you. It is possible to send a transaction to public keys, which is also completely secure.
You can share your public Bitcoin wallet address with peace of mind. No cryptocurrency can be stolen through its public address. The only way to make it possible for attackers to steal your wallet is to have your wallet’s private keys in their possession.
A Bitcoin wallet always makes a distinction between public keys and private keys. A public key can be compared to your email address. Anyone can send email to your email address, but only the owner of the email will be able to read incoming emails. With a crypto address, the situation will be exactly the same, and others can use your public wallet address to send crypto, but only the owner of the wallet can use the assets in it.
The private key is actually the password to your cryptocurrency wallet. The private key is a unique code that is recommended to be kept offline in a place where no one can access it. Sharing personal data, including wallet private keys, can put your digital assets at risk, so if necessary, only share the public address and keep other codes in a very safe place.