Earlier it was challenging to trace Bitcoins, but current technology has led to practical ways of tracking stolen bitcoins.
To track the person who received the bitcoin, the address owner must be aware of it.
However, governments do not want bitcoin owners to be unknown, and they are trying to regulate bitcoin in a way that can be monitored.
It’s nothing new since people have been doing blockchain analysis and bitcoin tracking since bitcoin was used to exchange stuff on the internet.
Is Bitcoin Anonymous?
As Bitcoin has become more popular and some criminal activity has been disclosed on the Bitcoin network, many people have wondered whether their Bitcoin transactions are anonymous or whether there are some essential complexities that they should be aware of.
Bitcoin tumblers allow many different users to put their cryptocurrency in a “bucket” and then return the same bitcoin value to each user, but with bitcoins put into a bucket by other users.
Bitcoin is not entirely untraceable, but it is a common misunderstanding, as Bitcoin is well known for masking user identity.
Users who rely on bitcoin exchanges ( such as Bitfinex, Binance or Kraken ) to exchange money for bitcoin must disclose their personal information to such an account.
However, governments are beginning to introduce new rules that could force an anonymous Bitcoin exchange to verify the identity of a new user before allowing them to purchase Bitcoin with fiat currency.
Create multiple addresses so that bitcoin can be randomly distributed, making blockchain analysis more difficult and anonymous.
Bitcoin is often presented as an untraceable payment method that facilitates illegal activities by allowing criminals to make and receive payments without being monitored.
There are many ways in which the identity of a person can be exposed to bitcoin transactions.
Now you have your bitcoin clean; you don’t want to waste all the hard work of using it in a trackable transaction.
As such, if you can pay with bitcoin and rely on the trader not to keep any PII records, the purchase may be anonymous.
If you prefer to spend your bitcoin on other cryptocurrencies or cash, the easiest thing to do would be to go to the exchange.
Portfolios, currency exchanges, mixing companies, and P2P sites have all been used to cheat bitcoin users.
Keep in mind that bitcoin is still the most widely accepted cryptocurrency.
Bitcoin is the only virtual currency with enough people who want to buy it to become moldy.
Cybercriminals use the creation and monitoring of Bitcoin portfolios, which can be done automatically, helping them find out which victims have paid.
Bitcoin transactions are public and contain all the information we need to track ransom payments, provided that we know which wallets to look at.
In most cases, payment tracking is not as easy as cybercriminals move bitcoins through multiple wallets to avoid payment tracking.
So, if you’re still thinking about using Bitcoin for your transaction gateway, be careful that you can track it as well.
Most users use online bitcoin exchanges to exchange bitcoins for real currency, such as bitpay, coinbase, localbitcoins, etc.
As the number of pro traders is slightly lower in online markets, it is easy to look at the bitcoin transaction by going to their bitcoin address.
Oaktar can be used to collect much more than the information needed to identify and link someone to specific Bitcoin addresses and transactions and can do so without relying on cryptocurrencies.
As alarming as oaktar and its activities, no new information has recently emerged to indicate that the NSA has expanded its Bitcoin monitoring efforts to other cryptocurrencies.
These protocols include CoinJoin, Dark Wallet, bestmixer, io, sharecoin, and coinwap, all of which also offer Bitcoin and other cryptocurrencies the possibility of anonymizing their transactions.
In the meantime, the more direct and intrusive methods of the NSA are also based on the fact that crypto users unconsciously compromise their internet connections, which could not be expected to monitor all cryptocurrency transactions in mass.
Bitcoin, the Internet currency loved by computer scientists, libertarians and criminals, is no longer vulnerable.
But Bitcoin ‘anonymity is also a powerful tool for criminal financing: virtual money can keep shady transactions secret.