August 17, 2020 / Beginners

Some Tools For Anonymous BTC Transactions

Bitcoin Transaction Fees decreased

Many members of the crypto community consider Bitcoin transparency as a serious problem on the path of true financial freedom. We mean the ability to track BTC transactions.

On the one hand, it allows for the investigation of crimes in which cryptocurrencies are used. On the other hand, a public blockchain allows unauthorized persons to gain access to information about the amount of savings of a particular network participant. Thus, linking a person’s identity to a BTC address is not that difficult. And first of all, this applies to residents of states in which operations with cryptocurrencies are prohibited or monitored by the authorities due to strict regulatory legislation.

Despite the fact that Satoshi Nakamoto was unable to implement truly confidential transactions in his brainchild, bitcoins can still be sent anonymously, using some tricks.

Bitcoin Tumblers

The most popular way is to use the cryptocurrency tumblers. Such Internet resources offer numerous schemes for “mixing” payments by dividing them into small parts and sending them multiple times between different addresses. The amount of the original transfer eventually reaches the final addressee. At the same time, it is almost impossible to trace the connection between him and the sender. In addition, some services offer users the use of deferred transactions, making them even more difficult to track.

For the work done, Bitcoin mixers, of course, charge a fee of a few percent of the transaction amount, which is often not that high given the result.

As a rule, the cost and speed of anonymizing operations depend on the number of “shuffles” and the amount of the transfer.

There are quite a few cryptocurrency mixers that allow making Bitcoin transactions anonymous. But since there is always a risk that a little-known service will turn out to be fraudulent, you should only use options that have been tested by many users. There are such mixers as Blender, BitMix, Mixcoins, Bitcoin Mixer, and SmartMix.

Wasabi Wallet

Wasabi Wallet Bitcoin wallet allows you to conduct confidential bitcoin transactions in a manner similar to mixers. However, this is not about the usual “mixing” of coins between addresses, but about the use of the anonymous Tor network in conjunction with the CoinJoin technology and the ZeroLink blind signature protocol developed by Hidden Wallet and Samurai Wallet.

The main difference from using Bitcoin tumblers is that the user does not transfer his funds to anyone for management, i.e. the risk of a dishonest intermediary is excluded. In addition, the direct mixing process via Wasabi takes seconds.

This wallet is an open-source application and is only released in the desktop version for Windows, Linux, and MacOS.

Liquid Sidechain

Liquid technology, presented by blockchain company Blockstream, is used as an add-on to the Bitcoin network, allowing the creation of dedicated transaction channels between exchanges and other platforms. This allows you to transfer assets not only much faster than on the regular Bitcoin network but also anonymously. It uses a unique method of cryptographically masking transaction amounts from everyone except the direct participants in the transaction.

Initially, this technology is aimed at large players in the cryptocurrency market. But it can also be used by traders who are clients of Liquid’s partner exchanges and users of the eponymous wallet. It is expected that over time, such confidential transactions could be incorporated into the main Bitcoin protocol.

Perhaps, this is where the acquaintance with the features of Bitcoin transactions and methods of their improvement can be considered complete. If you master at least half of the described tools, interacting with the blockchain of the main cryptocurrency will become much more efficient and safer compared to using the “default settings”.

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