One of the most popular methods for keeping your bitcoin private
is to use different addresses for every transaction. By using a different address for each transaction, you can guarantee that no one will link any bitcoin sent to you to any other bitcoin address.
Bitcoin is on chain by default. The block explorer lets you lookup any transaction, from people sending each other tiny bits of bitcoin to others trading large amounts on an exchange. By default, the payments you receive are public, and tied to your identity.
The best way to protect yourself from this loss of privacy is to use self custody. Using a private key that only you know about. That private key should never even touch the internet or any electronic device that's connected to the internet. Bitcoin can be used offline (cold storage) in this way and it's very secure. There are many ways to accomplish this, but the gold standard is a hardware wallet like coldcard or trezor or bitbox.
When you use these devices, they keep your private keys private and never reveal them anywhere else. They also handle signing transactions for you without exposing your private keys to any risks at all. The device itself is designed such that no one else can ever steal your bitcoin unless they physically take the device from you and extract the private key themselves - which isn't even possible with coldcard because it has a read-only USB port that cannot be used to transfer data off the device at all!
You don't have to be a master of bitcoin privacy to get started with self custody. What you need to do is get your hands on some bitcoin, and a hardware wallet. This can be done in many ways but the most important thing is that you have control over your bitcoins. You should also keep track of your bitcoin addresses and transactions since they will be necessary in order to recover your coins after a harddrive crash, lost or stolen hardware wallet.
1) FIND A BITCOIN WALLET THAT WORKS FOR YOU
The easiest way to get started is with an online hosted wallet like Bitpay's Copay app which allows for multiple signers on shared accounts (2-of-3, 3-of-5 etc).
A step up from that is an SPV wallet on your phone like Specter or Wasabi which does not connect to any centralized server but rather connects directly to the bitcoin network for sending and receiving funds. This way you can still use the convenience of sending and receiving directly from your mobile device but without trusting a third party with your keys.
Another option is a hardware wallet such as Coldcard, Trezor or Bitbox which requires slightly more setup but allows you to store large amounts of bitcoin offline in
Bitcoin is not anonymous. While it's true that Bitcoin transactions don't reveal personal information like your name, address and credit card details, they do leave a trail of digital breadcrumbs that can be traced by law enforcement.
Bitcoin has been praised for its privacy properties, but that's true only if you use it correctly. Here are some things to consider:
Use different addresses for different transactions. Bitcoin addresses are a string of numbers and letters which can be used to store and transfer bitcoin. If you're going to buy stuff from your favorite online retailers, use a new address every time. That way, you can see from the blockchain that the retailer received your money but has no way of knowing where you sent it next. If you're receiving bitcoin from someone else, give them a new address each time as well.
Consider using Lightning Network. This is a layer on top of Bitcoin that allows for low-cost transactions with improved privacy properties. Lightning transactions typically cost less than a cent and settle in seconds, but they're not compatible with all wallets yet and are not appropriate for large amounts of value (yet).
Practice self custody. Self custody means storing your own bitcoin in a wallet you control, such as a hardware wallet like Coldcard, Trezor or Bitbox
lastly
I used to think it was a myth, but it is not. Privacy matters and many people say they care about privacy yet they use centralized exchanges.
The problem here is centralized exchanges,which cannot be private as they require government ID and a bank account, which requires state permission & is easily surveilled.
Bitcoin ATMs or cash by mail/cash in person via Bisq, HodlHodl, LocalCryptos or Agoradesk would be safer.
The best way to keep your bitcoin private is by practicing good OPSEC (Operational Security) and self custody of your bitcoin with hardware wallets like the
- Coldcard
- Trezor or
- BitBox02.
Even if you don't use them for transactions, you can just store your bitcoin on them so that when the time comes you can use them to sign transactions. You should also use different addresses for each transaction.
