Bitcoin & Anonymity

[yhiaali3]

Bitcoin can be tracked by anyone but your identity can only be known by using centralized exchanges and third party services that require KYC, so there has been a lot of talk recently in the forum and also on various social media that we should move away from centralized exchanges and use decentralized exchanges that don't require KYC.

It is best and safest to keep bitcoins in wallets that have their own keys, but if you want to trade it is better to use the part that you want to trade only in central exchanges and whenever you get some profits you can send them to the wallet.

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[mvdheuvel1983]

2) How do we continue to remain anonymous while trading bitcoins?

Bitcoin transactions are pseudonymous rather than truly anonymous. Because of this, the recipient of a bitcoin payment will be able to identify your bitcoin wallet address.
They can also learn more information about your bitcoin account once they have this information. Nobody wants the specifics of their bitcoin account to be known to others. You can utilize a bitcoin mixer to genuinely maintain your anonymity.
Using a bitcoin mixer, then, will allow your transactions to continue to be untraceable. Users can hide the connections between their Bitcoin addresses and real-world identities by mixing their bitcoin.
They can utilize Bitcoin more privately as a result of this.

[Oasisman]

Yeah just like everyone were saying Bitcoin transactions are can be tracked in the blockchain, as it serves like a huge ledger that records each and every transactions, but your identity remains kept, it was only your Btc address are visible, but not until you use a centralised exchange that requires KYC.
If your transaction ends up to that specific CEX Btc address, then that's the time you'll going to be identified and that your anonymity are completely lost.

[lixer]

We can use blockchain explorers to check transactions, UTXOs.
List of useful Bitcoin block explorers

You can use https://www.walletexplorer.com/ for address grouping and wallet labeling.

Services like Chainalysis too.

Exchanges have to fulfill requirements from governments nationally and regionally about KYC, AML so they have internal metrics and tools to detect wallets, addresses, UTXO movements. If exchanges have these tools, governments have them too. If governments require officially, exchanges will give them reports too.

If they are a centralized exchange but luckily there are still decentralized exchanges that we can use if we want to attain anonymity. I understand why some governments do that. It's not that they want to control bitcoin but they are only concerned of the growing scams and frauds happening in the bitcoin world. With the help of KYC, the identity of those scammers and fraudsters will be identified easily so it will now be easier to catch and punish them accordingly.

I know that the KYC system of the exchange isn't 100 percent perfect at the moment and some criminals can still get away with their crimes but let's hope this will be improved soon and they will tighten their securities more for the safety of the users.

[Yatsan]

Yeah just like everyone were saying Bitcoin transactions are can be tracked in the blockchain, as it serves like a huge ledger that records each and every transactions, but your identity remains kept, it was only your Btc address are visible, but not until you use a centralised exchange that requires KYC.
If your transaction ends up to that specific CEX Btc address, then that's the time you'll going to be identified and that your anonymity are completely lost.

Anonymity does not work that way. An address would be surely found in the blockchain but knowing who's behind that address would be a different thing in which for me shows the true anonymity in this industry unlike with centralised payments wherein online wallets are registered. If you're a daily consumer, you won't that much be able to appreciate this aspect of this technology. But if you are a big consumer, importing and wxporting gooda, then you'd be able to escape huge taxes to the government. It is more of an smuggled transaction if I would be asked. You're still safe even if people would determine or emphasize a certain one, but they won't easily be able to know the owner of the address.

[Fullcoinese]

I have read that authorities are able to track the bitcoins if they are being move illegally. For example, if a wallet was hack and also most cryptocurrency exchange would require you to show ID when you sign up.

So my questions are..

1) How are the authorities able to track our bitcoins?

2) How do we continue to remain anonymous while trading bitcoins?
3) Are there cryptocurrency exchanges that does not require our ID to trade in large quantity?

we can know all transactions that occur in Bitcoin. but as long as you don't store your Bitcoins in a wallet that requires KYC, you will remain anonymous.
conversely, when you send your Bitcoins to a centralized exchange that asks for KYC, of course, the authorities may know you made a wrong transaction.
although some centralized exchanges do not ask for KYC when you withdraw a certain amount. if you want to remain anonymous, you can use it as suggested by some of the other members above.

[jrrsparkles]

I have read that authorities are able to track the bitcoins if they are being move illegally. For example, if a wallet was hack and also most cryptocurrency exchange would require you to show ID when you sign up.

So my questions are..

1) How are the authorities able to track our bitcoins?

2) How do we continue to remain anonymous while trading bitcoins?
3) Are there cryptocurrency exchanges that does not require our ID to trade in large quantity?

Cryptocurrency exchanges are not the only place you can sell your bitcoins, it can be done in completely p2p way and fiat transferred physically means that is not going to be connected with exchange.

1. Every exchange made KYC mandatory to sign up so whenever someone hack someone's money and move it to any of the exchange's wallet then it will be connected with that identify.

2. Don't use centralized exchange.

3. There is no exchange which says we will never ask for KYC.

[justdimin]

I have read that authorities are able to track the bitcoins if they are being move illegally. For example, if a wallet was hack and also most cryptocurrency exchange would require you to show ID when you sign up.

I get that some people like this, but for me it was never the point to be honest. I never hid the fact that I owned bitcoins and I never hided how much neither. Maybe that is because I never became rich, which means that the tiny amount I have is not really a big deal, most people I know have more money than me overall, even if not in liquid cash form, they have more assets than me so that means nobody really cared about me being in crypto since I wasn't rich.

If I made like millions of dollars out of this, then maybe that would have changed some things and in that situation I may have wanted to hide my wealth, but I do not know about this, since it never happened.