Does Bitcoin Really Achieve Anonymity as the Cryptocurrency Community Thinks?

Many people take to cryptocurrency because of its anonymity and ease of transaction. However, it is difficult to determine if cryptocurrency gives full anonymity. While handling Fiat, you simply exchange money with someone you will probably never meet again. The only problem lies with the Credit Card Systems that store user information, a system introduced to prevent online fraud.

If I travelled to the US and I want to buy a hat, I will take a 100 dollar bill and give it to you in exchange for a hat. Later on I will fly back to Kenya. The probability is that I will never see you again and you will never see me again. You might forget about me and I will forget about you. This is because you are handling many customers at the same time. Therefore, we both remain anonymous.

With cryptocurrency however, the anonymity is not at the same level that cash is. You do not need to use your real identity while transacting, However, it is possible for someone to track of all transactions and track you down.

Cryptocurrency uses a public ledger for transactions; this is a large receipt for ever sell and buy on the internet. Whatever I buy right now, it is possible for you to track it if you have my public address. This is how users can track whales, even though their identity is impossible.

However, the internet is smart and people have tracked crypto wallets of huge Billionaires like Vitalik Eth and Elon Musk. For example, Vitalik Eth sharing Shiba Inu as charity to India.

It is possible for me to go to Etherscan and track a friend's transactions online. If a Friend sends me Cryptocurrency, I can easily save their public address using a name in my wallet and track their transactions; unless they open another Wallet.

Therefore, any person using complex algorithms can crack the transaction path and verify your identity in real life.

Companies that Track Cryptocurrency Transactions

Following cryptocurrency fraud, companies and cybersecurity experts are creating software to track verification of crypto transactions. The software use complex algorithms to verify user identity.

1. Coinbase Tracer- This application allows users to trace transactions through a blockchain. The software uses public sources of information and uses no data from Coinbase. Coinbase sold the software to Customs Enforcement (ICE) agency and US Immigrations for $1.36 million and $29,000 for the software licensing in August 2021. The software’s original name was ‘Coinbase Analytics’.

2. Ciphertracer - It is the world’s first blockchain forensics team with a team of experts collaborating to fight crypto crime.

These are the only crypto tracking software I know for now. Incase you know of others, feel free to leave a comment and a link in the comment box below. Thank you.

Closing Thoughts

Well, I suppose cryptocurrency is not as anonymous. One advantage however, is you can move large funds from account to account using little fees and no government monitoring. However, it is difficult to perform cryptocurrency offline transactions. This would be a good business idea for you as a crypto enthusiast. How can we build offline cryptocurrency transaction systems? Leave your comments below.