Are Blockchain Transactions Anonymous?

April 26th, 2018

Bitcoin is becoming more popular than ever, an increasing number of online merchants from different places offer the option to pay using Bitcoin. Compared to traditional currency, there are numerous benefits offered with Bitcoin, one great promise of this blockchain technology is its anonymity. This means all transactions are recorded and made public, but they are linked with one electronic address. So whatever you buy using this new technology can’t be traced back to you.

This feature is handy for many, but you need to understand that this anonymity, is by no means perfect. Most security experts call it pseudonymous privacy. This means you can preserve your privacy only until the pseudonym is not linked. As soon as someone makes a successful link to your anonymous books, the secret will be revealed. All your details under the pseudonym become public. In a similar way, as your personal details are linked to the Bitcoin address, all purchase history will also be revealed.

This is now raising concerns for people who are eager to use Blockchain technology to make anonymous purchases. Often, people want to know how easy it is to link personal details with digital currency transactions.

Searching For the Answer

Experts reveal that the way information or data is leaked while making ordinary purchases, make it simple to link buyers with the blockchain transactions they make, even if he or she is using additional privacy protections. The main culprits here are cookies and Web trackers. Not many will know that a small piece of code deliberately get embedded into the site, which then sends information to all third parties about how people are using the site. Now, these common Web trackers send information to popular search engines or social networking sites. Every detail about the page usage, browsing habits, purchase amounts, and so on are shared. You will be surprised to know that some trackers even reveal personally identifiable information such as addresses, names or other contact details.

This is how information about a transaction or blockchain technology is leaked into the internet, from which law enforcement agencies, governments, and malicious users collect data and analyze it.

How Easy Is It To Use These Details?

This is the one of the most important things to know after you realize blockchain technology is not completely anonymous. This process needs to know every individual’s personally identifiable information such as name, address and email, so that they can link easily. Major merchants around the world now allow blockchain transactions, such as NewEgg, Microsoft, Overstock etc. Almost half the number of merchants leak payment information to various third parties, mostly from shopping cart pages. This may be shocking for individuals who are using the blockchain technology for its anonymity, but you need to understand that these leaks are not because of any loopholes in the system. It’s the merchants themselves, that are leaking details.

Every blockchain technology user will be surprised to know that these information leakages are intentional for the purpose of analytics and advertising. Researchers found that some information is also shared. Some merchant websites leak exact transactions on the blockchain technology to trackers. This is bad news for individuals who are excited about this blockchain technology. With leaks like this, all of their information and details can easily be found, the purpose of anonymity won’t be served anymore.

Who’s To Blame?

It’s these merchants who are leaking all your personal details, at times unintentionally, but mostly intentionally. However, there are several ways that you can protect anonymity. Advanced new tools are being created that will serve this purpose.

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