Cryptocurrencies like Bitcoin have provided an alternative way to transact and invest. In the conventional context, you would use cash or credit card to pay for goods and services. Likewise, you would use the same methods to buy stocks and other investment assets. The problem with these payment options was the lack of anonymity. Before discussing the measures, you can visit Bitcoin Code to start trading, this platform also allows you to trade Bitcoin and other cryptocurrencies.

The conventional financial system is centralized, placing the government, commercial banks, credit card companies, brokers, and other entities in control. For example, your credit card company would be an intermediary whenever you used the card to pay for something. Your bank would be an intermediary whenever you made a bank transaction.

The implication of having intermediaries is that they already know who you are. When opening a bank account, you provide your details, including name, telephone numbers, and even address. Therefore, the bank can see and monitor all your bank transactions. But what if you want to remain anonymous?

That is where Bitcoin comes in. Bitcoin does not have intermediaries because of its blockchain technology. Your bank cannot identify you on Bitcoin or when transacting on the Bitcoin platform. Yet, even with enhanced privacy protection, your identity can still leak on Bitcoin. That's why you need to take the following measures to remain anonymous.

Use Cold Wallets

As a Bitcoin user, you'll need to have a digital wallet. Your digital wallet will be like your digital bank account, but it can be hot or cold. Hot wallets link to the internet, but cold ones don't. And this is what makes the latter much better if you want anonymity.

A cold wallet is remote, and since it does not connect to the internet, it is less vulnerable to attacks or hacking. On the contrary, hot wallets constantly connect to the internet, which means that many internet users can attempt to hack them. Your anonymity will be compromised if someone manages to hack your hot wallet.

Use Different Addresses

You can remain anonymous when using Bitcoin by using different addresses for different transactions. Usually, each transaction will have a unique address. If you link all your Bitcoin transactions to a single address, it becomes easier to identify you. Your crypto exchange can quickly identify who you are when you keep reusing an address.

One way to ensure that you can use different addresses for different transactions is by using HD wallets. While HD wallets have high privacy levels, they also allocate separate addresses to each exchange. With such a heightened level of security, it is more difficult for somebody to access your wallet and get your identity.

Protect Your IP Address

You can also use Bitcoin anonymously by protecting your IP address. Each computer has an IP address that can lead to your location. Hackers can send malware to your computer that you use for your Bitcoin transactions and access your IP address. With that, they can know precisely where you are.

It is essential to avoid using the same computer that you use for Bitcoin transactions for other purposes, such as accessing social media networks. Use different computers or devices to reduce the risk of revealing your IP address. For example, you can use your smartphone for social media and other internet searches and use your laptop exclusively for Bitcoin transactions.

Parting Shot

Bitcoin provides anonymity to users thanks to the blockchain technology underpinning it. However, somebody can compromise your anonymity outside the blockchain. That is why you need to take additional measures like those discussed above.