Transactions on public blockchains are always traceable. Any Bitcoin users, Bitcoin senders to be more exact, should always find ways to obscure sender transaction, so you can protect your funds and information. Here is the guide to obscure sender crypto transaction and reasons why.
Reason to obscure sender crypto transaction
1. Understanding Bitcoin’s transparency
As designed by Satoshi Nakamoto, all the transactions on the Bitcoin network are stored on a distributed ledger, which is publically available throughout the world. This creates what is called Bitcoin’s transparency.
The point is that anyone can view a public address and check the number of Bitcoins associated with it. However, the dark side is that a user’s identity can be found by tracking the IP addresses involved in the crypto transactions.
That’s why Bitcoin is not really anonymous. With every transaction publicly disclosed on the Blockchain and identity verifications (known as KYC) required by exchanges, it’s easy to trace transactions back to your wallet.
2. All Bitcoin transactions are traceable
As every transaction uses Bitcoin from a prior transaction, and the blockchain is public data, every Bitcoin payment has a traceable history that can be viewed by anyone.
While addresses are totally traceable, they aren’t directly linked to any person or entity. However, they also cannot hide your financial history. And with the use of some underhand techniques, your real identity can easily be exposed.
The most important thing to remember when attempting to remain anonymous is to not reveal your identity when you first buy Bitcoin. This is because every transaction that takes place on the Bitcoin blockchain can be viewed by anyone, so your transactions can be traced back to your original address.
3. Why do we need to obscure sender crypto transaction?
The main reason is that you don’t want to get hacked or become a potential target. Publicizing your identity and financial status on the Internet is never ideal.
Bitcoin’s Blockchain is built on solid cryptography which prevents counterfeiting and other types of fraud, but the human element in its transactions is certainly its weakest link.
Many people are looking for ways to send Bitcoin anonymously because they hate giving their photo ID to different crypto exchanges.
Fortunately, there are many ways to hide your transactions. Some cost money, while others are totally free. Let’s have a look at the pros and cons of these methods.
5 ways to obscure sender crypto transaction
1. An anonymous crypto wallet – The best way to obscure sender crypto transaction
The idea of an untraceable money transfer is the main purpose of an anonymous crypto wallet. With one, you can send Bitcoin (or other assets) without anyone being able to see the details of the sender, receiver or how much was involved. Therefore, your crypto assets are well-protected.
There are many anonymous crypto wallets on the market these days and one of the best is The Incognito Wallet.
This Wallet is the first privacy-preserving mobile wallet for all your crypto assets. To enable privacy for your crypto, simply deposit BTC, ETH, PRV, or any of your favorite ERC20 or BEP2 tokens into the Incognito Wallet. It’s really as simple as that.
That’s all you really need to do. The transactions made through Incognito Wallet are completely confidential. To turn off incognito mode, you simply withdraw your tokens back into another crypto wallet, which you can do at any time.
The Wallet is based on the Incognito Chain, which is a project focused on building a privacy sidechain to many major public blockchains. Thanks to this innovative idea, you can send and receive your favorite coins with total privacy and anonymity.
Using the Incognito Wallet is the best method for obscuring senders’ crypto transactions easily and for free.
- No one can see your balance or track your activity. As a result, the only one who owns your financial information is you.
- The Incognito Wallet is both user-friendly and technologically innovative.
- It’s totally free. You don’t need to pay for any of its awesome features.
- The concept of anonymous crypto wallets is new in the space, so many people may not be willing to switch from something they’re more familiar with.
2. Bitcoin Mixing – Break the link between your Bitcoin addresses
As previously explained, people can track your Bitcoin transactions because all the transactions are stored on a public ledger that shows the link between every address. One way to break that link in order to obscure sender crypto transaction, is Bitcoin Mixing.
Mixing Bitcoin breaks the link between wallet addresses by either creating temporary addresses or by swapping coins with other addresses of the same value. This method makes it harder for prying eyes to trace your transactions on the blockchain.
Some choices that could be worth considering are Smartmixer, Wasabi Wallet or Samourai Whirlpool.
Bitcoin mixing methods obscure sender crypto transaction so no one can trace back sender’s address.
- This service isn’t free. Users will need to pay quite a lot if they use it frequently.
- You must trust the service providers not to steal your funds and keep your login information secure.
- The service is only available for Bitcoin transactions, which is no good for holders of other forms of crypto.
3. New addresses wherever you make a crypto transaction
When using HD wallets such as the Ledger Nano X, Trust wallet or Trezor, you can generate any number of receiving addresses you want.
Whenever you want to transact Bitcoin, use a brand-new address. This method is somewhat similar to Bitcoin Mixing. It helps to keep your crypto transactions untraceable because it’s very difficult for someone to link all of those random addresses together.
If you only use one address, a bad guy can track every single movement, figure out how much you have stored and even worse, work out your real identity to steal your assets. That is not a risk worth taking.
- It’s easy to generate new addresses. Many crypto wallets help you to do so with just one click.
- It’s hard to manage all of your addresses. If you trade a lot, you will have so many that it might be hard to keep track of them.
- Generating a new address is free. However, making a transaction is not. When you want to send your coins to one or two addresses, the transaction fees will cost you more.
4. Privacy coins – An alternative method for hiding your cryptocurrency transactions
As it’s now common knowledge that Bitcoin is traceable and always has been, the crypto community is quickly beginning to realize that in order to send coins anonymously, all you really need are privacy coins.
Privacy coins allow users to transact freely with complete privacy and confidentiality. The details involved, such as the addresses of the sender and receiver and how much was sent, are completely hidden. P
Privacy coin is the popular way to obscure sender crypto transaction. However, this method isn’t suitable all the time. For example, say you have BTC and want to hide your Bitcoin transactions. If you use BTC to buy privacy coins to send anonymously, you’re still not obscuring your Bitcoin transactions.
- Privacy coins were created to make private crypto transactions. For transferring money and obscuring the sender’s transaction, privacy coins really are ideal.
- It’s not ideal when you want to shield other coins’ transactions such as BTC or ETH.
5. Private browsers and VPNs – Staying anonymous on the Internet
If you weren’t aware, most common web browsers track your data, IP address, and browsing history, even when you’re using incognito mode. When buying, selling or storing coins, you’re better off using a privacy browser like Tor or Brave, which is also a blockchain project.
Moreover, you could use a VPN that doesn’t store the history of your activity on their servers. VPNs encrypt all of your Internet traffic and route it through multiple servers of your choice in different locations, before arriving at its final destination.
Using a VPN is another way to improve the anonymity of your Bitcoin transactions. However, you will have to trust the VPN service provider not to log your activities.
- Even if you don’t need to make a crypto transaction, using a private web browser and/or a VPN is a solid way to protect your data, especially financial information.
- Many private browsers are now free to use.
- Some VPNs/Private browsers are not particularly user-friendly.
- Some may find it hard to change their current habits and switch over to these methods.
The Summary of “Ways to obscure sender crypto transaction”
Unless your intention is to receive public donations or payments with full transparency, publishing your cryptocurrency address on any public space such as a website or social network is not a good idea. If you choose to do so, always remember that even if you move any funds from this address to one of your other others, everyone, even the bad guys, can track every single movement.
Self-awareness is always necessary. If you want to obscure sender crypto transaction, there’s no reason to publicize yourself on the chaotic Internet. You might do it accidentally, but the loss of assets will always be very real.
That’s all from our side. This guide brought you the main tools and techniques at your disposal to shield your cryptocurrency transactions. Now it’s up to you to experiment and find the way that works best for you. Good luck out there and stay safe!