Can bitcoin be tracked?

Bitcoin works with an unprecedented level of transparency that most people are not used to dealing with. All bitcoin transactions are public, traceable and permanently stored on the Bitcoin network.

Can bitcoin be tracked?

Bitcoin works with an unprecedented level of transparency that most people are not used to dealing with. All bitcoin transactions are public, traceable and permanently stored on the Bitcoin network. Bitcoin addresses are the only information used to define where bitcoins are allocated and where they are sent to. These addresses are created privately in each user's wallets.

However, once the addresses are used, they are contaminated by the history of all the transactions in which they participate. Anyone can view the balance and all transactions from any address. Since users often have to reveal their identity to receive services or goods, Bitcoin addresses cannot remain completely anonymous. As blockchain is permanent, it is important to note that something that is not currently traceable may become something trivial to track in the future.

For these reasons, Bitcoin addresses should only be used once and users should be careful not to reveal their addresses. While digital currency can be created, moved and stored outside the purview of any government or financial institution, each payment is recorded in a permanent fixed ledger, called a blockchain. Each transaction is recorded in a publicly available permanent ledger known as a blockchain. While bitcoin can be minted, moved and stored without the supervision of any central authority such as the government, every bitcoin transaction is recorded in a publicly available permanent ledger known as a blockchain.

Launched 11 years ago, bitcoin is a digital currency that operates independently of third-party oversight by banks or governments. The narrative that Bitcoin and other cryptocurrencies are predominantly used for criminal activities is simply not true. In addition, you may also want to be careful not to publish information about your transactions and purchases that could allow someone to identify your Bitcoin addresses. Companies have emerged that sell Bitcoins at a profitable price and offer ATMs where you can convert them into cash.

In the original Bitcoin whitepaper, inventor Satoshi Nakamoto suspected that wallet addresses could be used to link transactions with a common owner and, in fact, recommended that users use a new address for each transaction to provide acceptable levels of privacy. Strictly speaking, Bitcoins are nothing more than amounts associated with addresses, unique strings of letters and numbers. There have been several examples of law enforcement agencies tracking millions of dollars worth of stolen bitcoins. According to court documents, investigators accessed the password of one of the hackers' Bitcoin wallets, although they did not detail how.

Despite the fact that the Bitcoin Project itself discloses this information on its website, many people have taken the confusing nature of their wallet addresses so that payments cannot be traced. The Koshys noticed that sometimes a computer sent information about a single transaction, meaning that the person on that IP address owned that Bitcoin address. Unlike government-issued money, Bitcoin has no Federal Reserve, gold backing, banks or physical banknotes. The task of keeping the system up and running and avoiding cheating is left to a volunteer workforce known as Bitcoin miners.

This Science article goes much deeper into how authorities ensure criminals can't hide behind Bitcoin. This means that most of these services are required to implement some degree of know-your-customer (KYC) solutions, thus linking a real-world identity to bitcoin addresses and transactions. Unless your intention is to receive public donations or payments with complete transparency, posting a Bitcoin address in any public space, such as a website or social network, is not a good idea when it comes to privacy. .

Edmund Elsensohn
Edmund Elsensohn

Hardcore tea nerd. Evil zombie buff. Avid social media lover. Unapologetic twitter enthusiast. Total tv advocate.

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