How to Preserve Anonymity When Using Cryptocurrencies

Started by kosmon, Dec 30, 2022, 03:23 AM

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The UN recognizes anonymity as a human right, but many people associate it solely with criminal activity. The "darknet" and other anonymous networks are often seen as tools for illegal actions. However, the need for anonymity arises in everyday life for many individuals. This can be seen through the high demand for privacy tools like TOR and VPNs, and the hesitance to post oppositional opinions on social media without anonymity.

Moving onto anonymous money transfer, traditional methods such as bank transfers to front persons and newer technologies like bitcoin and other cryptocurrencies will be discussed. Cryptocurrencies use a digital signature algorithm that ensures the reliability of information about transfers within the network without the need for a central regulatory authority. Each transfer is recorded in a block, which is created by participating miners. In exchange for their computing power, miners receive rewards prescribed in the program code of the cryptocurrency, as well as commission fees from transfers in their blocks. As each block is calculated, a new coin is added to the total number of coins.

It's important to note that while anonymity can be used for illegal activities, this article is intended to broaden the understanding of finance and information technology specialists.

The cryptocurrency market is active and constantly evolving. Many thousands of transactions occur daily, and illegal exchangers frequently change their payment details and avoid keeping large amounts in one place to prevent losing funds. This make regulators' attempts to shield citizens from undeclared wealth unlikely to succeed.

One must trust cryptocurrency exchangers when using them, as no one can guarantee their integrity towards customers. Using exchangers that do not require excessive personal data and frequently changing banking details can help maintain anonymity when using cryptocurrencies on a regular basis.

To begin using cryptocurrencies, it is important to understand the concept of wallets. Official wallets like Monero offer a nice interface that maintains the necessary secrecy of the user's keys and does not require any binding to email or phone numbers. Electrum is also a good alternative for getting started with bitcoin. After creating a wallet, it's crucial to backup it up to avoid permanently losing access.


From the early days of cryptocurrency, critics and skeptics have failed to grasp its essence. Despite criticism, cryptocurrencies like Bitcoin rely on financial incentives to encourage network participants to maintain its existence and functioning. The miners may not value it, but they continue to produce blocks and ensure its security because they earn from it. Temporary large sum owners may not care about the future of cryptocurrency, but they will still launch a full node as it is safer and increases decentralization.

A cue ball can still thrive without a single supporter, as it will ensure its own existence regardless of whether people dislike or need it.


Cryptocurrency like Bitcoin has many advantages as a monetary system, and while it functions as a financial instrument, it is also much more than that. It allows for the exchange of values over a long period of time, serving as a possible solution to the limitations of modern money. However, looking at it solely from a financial perspective fails to see the larger picture.

An analogy can be made with a totalitarian state, where citizens are incentivized to ensure the existence of the state through taxes. This technology is beneficial only for the rulers of such states. But what if we create such a system with an algorithm (AI) in place of a ruler? This system would exist purely because it can, without benefitting anyone at all. Cryptocurrencies have the potential to pave the way for new forms of governance and economic systems that operate on a decentralized and impartial basis.


In the virtual world, privacy has become increasingly desirable, yet it also poses a threat from criminal elements. Attempts by hackers to obtain sensitive information from cryptocurrency operators are not uncommon, and law enforcement agencies are more likely to investigate large transactions.

Despite this, Bitcoin remains the most popular choice for those seeking privacy. Even government agencies have chosen to use it. However, special services can track Bitcoin transactions effectively, leading users to opt for more anonymous cryptocurrencies. While Bitcoin may offer some level of anonymity, its transactions are still monitored by government authorities, which may lead users to switch to more private options.