A Quick Guide to Cryptocurrency Privacy: 5 Tips on How to Stay Safe
With cryptocurrency privacy and security becoming more important than ever, many traders and users are looking for tips on staying private when using crypto.
In this post, we’ll share some valuable tips on how to stay private while trading crypto.
The Basics of Cryptocurrency Privacy
The first thing you need to know about cryptocurrency trading is that transactions are traceable, even though your identity isn’t linked to your IP address.
When you make a digital payment using your wallet or exchange, you provide details about the transaction, including:
the date and time of transfer;
the sender’s/receiver’s wallet address;
the amount sent;
and the transaction status.
Most popular blockchains like Bitcoin, Ethereum, and Solana have explorers that allow users to map activities and find transaction information.
For instance, some third-party sites allow one to enter Bitcoin addresses and find information related to that address and the recipient’s address.
Users can also view the transaction date and timestamp and identify spending behavior.
At the same time, malicious criminals can search for wallet addresses and find information that can help them trace your identity or pseudonym.
Depending on their capabilities, hackers can get access to your private key and steal your asset.
5 Tips for Staying Private When Using Cryptocurrency
1. Use Privacy Coins
Privacy coins are cryptocurrencies designed to keep transactions and withdrawals private.
Popular options include:
and iExec, to name a few.
All these coins (and more) hide the owner and their wallet’s balance, allowing you to preserve anonymity by obscuring cash flow across the blockchain.
Each privacy coin in the market employs a unique strategy to anonymize user transaction data.
For instance, some use temporary addresses while others split the transactions into multiple small ones.
Coins like Zcash enable verifications without using specific information, such as the recipient’s address.
2. Use Mixing Services
Mixing is a popular crypto jargon used to describe the process of using a third-party service to break the connection between senders and receivers.
In other words, mixing services split addresses at both ends of the transaction to protect the sender and anonymize the source of funds.
Using mixers like ChipMixer, Sinbad.io, or Mixero, you can enhance privacy and security by making your transactions more difficult to track.
By doing so, you can improve protection from hackers and lower the risk of scams.
3. Use a VPN
Do you know how to define VPN?
A VPN stands for a virtual private network (VPN), and it’s one of the best security tools you can use to stay private when using crypto.
The solution creates an encrypted traffic tunnel that hides your IP address, activities, data, and communications. In other words, a VPN can protect your crypto wallet, especially if you use unsecured public Wi-Fi.
Try a VPN and test the tool from different providers to find the best one for your trading needs.
4. Use a Private Wallet
A crypto wallet is a digital solution designed to store your crypto access keys so you can make different transactions.
In that context, a private wallet can hold your private key and information, allowing you full control over your assets.
Therefore, they’re a much better choice than exchanges from a cryptocurrency privacy perspective.
You don’t hold your private keys on your computer or device when you use an exchange.
As a result, they’re less susceptible to hacks and other types of cybersecurity threats.
5. Avoid Public Wi-Fi
Modern crypto traders can trade from anywhere as long as they have access to the internet. Due to this, many traders often access their accounts from cafes, bars, libraries, airports, and other spaces with free public Wi-Fi networks.
Public Wi-Fi networks are hunting grounds for hackers.
Since these networks aren’t encrypted, they provide a backdoor for easy access and enable hackers to steal your private keys and gain control of your accounts.
Therefore, you should avoid making crypto transactions over public Wi-Fi or you should connect to a VPN before doing so.
It’s quite easy for newbie crypto investors and traders to overlook the importance of cryptocurrency privacy.
However, with so many cybersecurity threats in the crypto landscape, most forward-thinking users are doing their due diligence and learning how to stay private when using crypto.
With our tips, you can keep your transactions and balance anonymous while keeping track of your activities.