Ways Your Identity Can Be Linked to Your Bitcoin Address Tracing

The key to keeping your Crypto transactions from being traced or Bitcoin Trace back to you is preventing others from knowing which addresses are yours. If you’re trying to remain anonymous (or more precisely, pseudonymous) with Crypto, read on for the most common ways people’s true identities are forever associated with their Crypto addresses. And try to avoid them.

Bitcoin Trace

It might also be worth checking out Using Crypto Anonymously for other best practices and pro tips.

Publishing Your Name and Crypto Address Online Who Knows Your Address:

Bitcoin Trace – Anyone on the internet Gary has received over 71 BTC to this address. This is a no-brainer and it’s the most common way ownership of a Crypto address is revealed. Lots of folks on the internet publicly display a Crypto address with their name attached to it in hopes that others will send them crypto. A few examples: Writing a personal blog with your real name on it and posting a Crypto address for donations.

Use your real identity on a forum and put your Crypto address in the post signature. Launching a website with your Crypto address anywhere on it and registering the website’s domain name with your real name. Unfortunately, once published, this knowledge becomes available to anyone with an internet connection. Specific Crypto addresses are easy to look up with a search engine. And thanks to things like Google Cache and The Way Back Machine, it will probably be like that forever.

Trading Crypto for National Currency on an Exchange Who Knows Your Address:

The exchange always kept tabs. And then they were leaked. Nearly every exchange that handles national (fiat) currency is subject to money laundering regulations, making it necessary for customers to prove their identities by providing scans of their government IDs, bank statements, and utility bills.

Unless you can fake these types of documents, the exchange will know exactly who you are and will retain these records indefinitely. You’ll be associated with all incoming and outgoing Crypto transactions on your exchange account.  So you can easily do Bitcoin Trace. It can indicate your ownership of any addresses related to those transactions.

Buying Stuff with Crypto Who Knows Your Address:

The merchant and/or payment processor deals with Bitcoin Trace. Revealing who you are when you make a purchase with Crypto can’t easily be avoided. The recipient of your Crypto payment can identify your sending address, plus any change address that your client sends extra crypto to.

Unless you’re purchasing downloadable digital goods, you’ll usually need to provide a name and shipping address. If the merchant uses a payment processor like Coinbase or Bitpay, your sending address may not be revealed to the merchant. But the payment processor will certainly keep a log of the transaction’s details and your personal details.

Using A Thin Client or Hosted Wallet Who Knows Your Address:

Server administrators The Electrum thin client doesn’t hide your Crypto addresses from servers. Thin clients don’t have a local copy of the blockchain, so they query a single server that does. These queries reveal all the Crypto addresses that belong to your thin client. Plus your IP address, to whoever operates the server. While thin clients have the capability to mask which addresses are yours using bloom filters, thinnest clients do not sufficiently utilize them.

Hosted wallets have firsthand knowledge of your Crypto addresses because your wallet resides on their servers. Any additional information you provide to them (such as phone number, location, or email address) can also offer clues to your true identity. Both of these types of wallets leak both your IP address and your addresses to third parties. Your IP address may not immediately reveal you’re true identity. But it can be used to help discover it and do Bitcoin Trace.

Using Crypto Without a VPN/Tor Who Knows Your Address:

Your internet service provider (ISP) likes to watch (your internet traffic). Crypto does not have any built-in encryption when it comes to broadcasting transactions across its P2P network. When your client relays transactions over the network, they pass through your ISP’s gateway servers in plain text. Your ISP can intercept and analyze this traffic, and then determine which of these transactions belong to your IP address (versus those transactions which you are only relaying).

The transactions that belong to you will first appear on the network via your IP address. Differentiating them from transactions that have already been propagated by other nodes. And then your IP address can be used by your ISP to look up your personal identity. They have it on file from when you subscribed to their service. Using Crypto with an encrypted VPN or Tor can effectively mask your real IP address, helping to disassociate your Crypto traffic from you.