3 Ways to Make Bitcoin Transactions Anonymous and Private

Bitcoin (BTC) is a virtual currency that works like money. It can be used for in-person and online payment for goods and services of companies that accept this advanced payment network. Its scaling popularity may be attributed to its reliance on peer-to-peer transactions, which supports its users’ anonymity.

Despite its promise of anonymity and privacy, the bitcoin blockchain is public, making it possible to trace blockchain transactions. The blockchain’s vulnerabilities risk having your identity revealed. Aside from your personal details, other personal information, such as your bitcoin transaction history and wallet address, are traceable.

The lack of privacy can jeopardize your safety. It makes you vulnerable to hacking, theft, and even physical attacks, especially if you have large amounts of BTCs.

The cryptosystem's vulnerabilities and the users' strong need for privacy and confidentiality gave birth to technological advancements and methods. These methods aim to address the bitcoin blockchain privacy flaws, which have resulted in targeted attacks.

This article features three methods that make your bitcoin transactions safe and anonymous. These are:

• Bitcoin Mixers
• Logless Virtual Private Network
• Buying Bitcoins with Cash

Can these methods restore our belief that anonymity and privacy are possible in cryptocurrency? Let's get our answer by learning more about each method.

How to Use a Bitcoin Mixer to Make Bitcoin Transactions Anonymous

What does a bitcoin mixer do to preserve your anonymity? Let’s begin with a bitcoin mixer meaning.

What is a Bitcoin Mixer?

It is a software or service that pools and jumbles coins from several users before randomly distributing them back to preserve their anonymity and privacy. No one can figure out who got the coins, how many were transferred, and who sent them.

How Does a Bitcoin Mixer Work?

A crypto mixer functions depending on whether you use a centralized or decentralized coin mixer.

Centralized Mixers

Centralized mixers are software or services owned by private entities. You can send the bitcoin to the mixer's address instead of the receiver's. After sending the coins to the mixer and paying the convenience fee, the mixer adds your coins into a pool and shuffles them with other users' coins. Then they send the coins to your recipient without a trace.

Decentralized Mixers

On the other hand, decentralized mixers use an automatic coin-tumbling process running on peer-to-peer protocol without needing permission. This technology is known as Coinjoin, used by several coin-tumbling services like UniJoin.io. Using a decentralized mixer means joining a large transaction with several crypto users, with their coins sent to different addresses.

Decentralized bitcoin mixers are popular among users due to their lower service fees. Getting the same coins you sent to the pool is unlikely, but you will surely get the same number of coins in your wallet after a certain period.

Benefits of Using Mixing/Tumbling Services

Thanks to their privacy features, coin mixers have proven beneficial to bitcoin users. Here are the top reasons you should use a digital currency mixing service.

It Prevents Hacking

?It’s easy to lose your virtual money in a virtual world. As a bitcoin user, you should up your game and ensure hackers cannot track bitcoin transactions. Cybercriminals can sneak into and hack your digital transactions and wallets. Using a bitcoin tumbler helps you to transfer BTC funds from one wallet to another without being traced. Malicious physical attacks can happen to any bitcoin user, especially those transacting in large amounts.

It Secures Your Anonymity and Privacy

Bitcoin mixing can offer security by keeping your crypto transactions anonymous. Your bank statements, wallet address, and personal identities will not be displayed in an open network for everyone to see. No one will know the number of coins you have in your bitcoin wallet, where they went, and other important details that can trace the transaction back to you. Mixing crypto coins and keeping them in different wallets will maintain your anonymity.

It Prepares you for a Sudden Change in Regulations

Cryptocurrency is only regulated if the sale of a security is under Federal law. Apart from this regulation, no other bank or government regulates and protects digital currency. However, with cryptocurrency gaining popularity worldwide, it's only a matter of time before stringent regulations will be implemented. Using a bitcoin mixing service gives you a safety net if your country suddenly bans bitcoins, governments impose controls that might lead to increased prices of cryptocurrencies or a scarcity of crypto assets.

Disadvantages of Shuffling Coins

Although coin mixing promotes anonymity and privacy, it has its potential drawbacks.

It Tends to Delay the Transaction

Transaction delays increase the lapse between sending coins to the mixer and when they reach their destination wallet. The delay makes Bitcoin analysis more challenging and untraceable. However, it takes longer to complete a transaction.

It is an Easy Target for Criminals and Regulators

The privacy features of coin mixers have attracted several entities to use them for their nefarious activities, such as money laundering. The association of coin mixing with these criminal acts has caught the attention of governments, which have begun the crackdown against coin mixing services involved in money laundering.

Is Bitcoin Mixing Illegal?

Some crypto exchanges restrict transactions involving mixed coins. As a result, some people consider bitcoin mixers illegal. Coin mixing is legal, although it is officially banned in some countries, such as Algeria, Bangladesh, China, Egypt, and Iraq.

The software is designed to protect the privacy and anonymity of cryptocurrency users and has legitimate uses. However, unscrupulous parties have taken advantage of its privacy features, posing the risk of being used for illegal activities like money laundering. The US government has sanctioned some bitcoin mixer services because of this bitcoin cleaning practices of cybercriminals.

The key here is to select a mixer that can guarantee your privacy. Take time to review a bitcoin mixer review to establish the mixer's credibility.

Selecting a Bitcoin Mixer Service

With the number of existing coin tumblers, choosing the first option you encounter might be tempting. However, selecting a mixing service must be done with utmost care if you want to be assured of security and efficiency. Always choose a reliable and reputable coin tumbler.

Consider the following factors when choosing a coin tumbling service:

• Security
• Speed
• Transaction Fees
• Mixing Code

Security

A good crypto coin mixer is committed to giving you the highest level of security. Look for a company with a good track record and impressive reputation in the industry, e.g., UniJoin. Do not compromise your security and anonymity.

Speed

The best bitcoin mixer offers both security and speed to its customers. They instantly mix the coins and send them to their destination address as soon as possible, except when the sender specifies a delay period. Some platforms take hours, even days, to process a single mixing request, which is something you should avoid. This slowdown happens a lot to starting bitcoin mixers that do not have enough coins to mix and process.

Select a mixer that immediately processes the transaction with the minimal waiting time. These indicate that the mixing service has a large reserve fund.

Transaction Fees

The usual mixing fee ranges between 1% and 3% of the total transaction amount. Beware of crypto mixers who charge lower than 1%—it might indicate poor bitcoin mixing service and put your security at risk. On the other hand, you might think a fee higher than 3% is an indicator of excellent service, but it is not necessarily so. It is best to work with companies whose fees are within the standard range.

Mixing Code

Leading bitcoin services use a mixing code, which users receive after their initial transaction with the nixing service. These codes ensure that you will not receive coins you have previously sent into the tumbler. That way, the transaction can never be traced even after it's completed.

You must key in this code each time you transact with the crypto tumbler.

How to Make an Anonymous Bitcoin Transaction Using a No-Log Virtual Private Network(VPN)

A no-log VPN refers to a VPN provider that does not collect, save, or transmit your personal information or online activities through the network.

Advantages of Using a No-Log VPN for your Cryptocurrency Transactions

Using a VPN for crypto trading offers several advantages, which include the following:

• The anonymity of your internet service provider (ISP)
• Phishing prevention
• Data encryption

The anonymity of Your ISP

Your VPN service will prevent your ISP from tracking your crypto trading activities, including the crypto sites you visit.

Phishing Prevention

Phishing puts at risk the user as cyber criminals deceive them into giving their passwords. Once scammers have your password, they can easily get into your crypto wallet. A VPN service can warn you against harmful links and block suspicious websites.

Data Encryption

A VPN encrypts data that passes through your internet traffic, preventing unauthorized people from taking possession of your data and using them maliciously.

Disadvantages of Using a No-Log VPN for Cryptocurrency Transactions

Although a no-log VPN provides security and anonymity, it presents a couple of potential downsides. For one, it can slow down the trading process preventing you from trading in fast-moving markets.

Moreover, some cryptocurrency exchanges bar users from connecting using a VPN. This disadvantage will deny you access to your account. Since VPNs hide your ISP, crypto exchanges may have difficulty facilitating your account registration or verification.

Selecting Your No-Log VPN Provider

Several VPN providers are available. Most providers maintain a shared IP address for their users, making it impossible to trace any transaction. VPNs encrypt your online communications, send them through a router, and deliver them to the sites you intend to reach.

However, not all VPN providers can offer the security you need, so it becomes imperative to study these companies thoroughly. Here are some points to consider when selecting a VPN service.

• Avoid VPNs based in any country belonging to the Fourteen Eyes Alliance to prevent being tracked and monitored.
• Choose a provider with a good reputation within the industry.
• Find one that accepts cryptocurrencies as payment to add another security layer.
• Read the providers’ privacy policy to determine the information they will collect from you before you decide.
• Refrain from using free VPN service

Steps to Perform Bitcoin Transactions Through VPN

Upon creating an account with your selected VPN provider, you may perform four easy steps to make an untraceable cryptocurrency transaction.

1. Log in to your VPN account.
2. Connect to your Bitcoin wallet.
3. Generate multiple addresses.
4. Input the destination address.

How to Buy Bitcoins Anonymously in Cash

Buying bitcoins with cash is a low-risk approach to keeping your bitcoin transaction anonymous and private. Aside from being one of the easiest methods of acquiring bitcoins, buying crypto coins with cash can be private and quick.

There are four options available if you want to buy bitcoins in cash:

• Peer-to-peer (P2P) exchange
• Cash deposit and balance payment service
• Crypto ATM
• In-Person purchase

Benefits of Buying Bitcoins in Cash

Regardless of your option, buying crypto coins in cash offers two important benefits: privacy and speed.

For example, most crypto exchanges no longer ask for your personal information when you trade in person. Or, if you are buying through an ATM, no verification is needed. Either way, you get to maintain your privacy, and the transaction is fast because no verification that tends to slow down the process is necessary.

Downsides of Buying Bitcoins in Cash

Buying crypto coins in cash has its appeal, but purchasing big amounts of bitcoin may be challenging. Most cryptocurrency exchanges have a set maximum dollar amount per purchase. The same thing applies to crypto ATMs.

In-person purchases may put you at risk unless you buy from a seller you fully trust. You may come across sellers who will ask for your personal details or simply after your money and have no intention of completing the transaction.

Tips for Safe Purchase of Bitcoins in Cash

Here are some tips to prevent anyone from tracking your transactions and keeping you safe when buying crypto coins in cash.

• Use a reliable escrow service to hold the crypto coins and send them directly to you upon completion of the transaction.
• Research the reputation of the crypt exchange or seller to determine if they are safe to transact with.
• Create an account using a temporary email address, preferably with a fictitious name to avoid being tracked.
• Meet with the seller in a public place where you feel safe transacting with them, preferably where there are security cameras, e.g., a bank, restaurant, or coffee shop.
• Use a secure device, preferably with a VPN, updated security patches, a trustworthy antivirus program, and secure passwords.
• Refrain from using public Wi-Fi networks.
• Be wary of your surroundings.

The Bottomline

In the cryptosystem, nothing can guarantee absolute anonymity and privacy. Despite claims of cryptocurrency being anonymous, bitcoin transactions can be traced. But there are ways to tighten your security as a user. Among these ways are coin mixing, the use of VPN, and buying bitcoins in cash.

Coin mixing or tumbling is software designed to enable digital currency transactions without exposing your identity. As a digital wallet holder, you no longer fear being tracked by malicious hackers.

But coin mixing is not the only way to preserve the anonymity and privacy of bitcoin transactions. You can do it through VPN or buy BTC in cash. Each method provides you with several options. Researching and studying your options well is critical so you can transact safely.