What is the best way to spend BTC from an Electrum wallet with privacy?

[takuma sato]

If you get paid in BTC address you have on an Electrum wallet, and you want to pay for someone that sells a good or service in exchange of BTC, but for obvious reasons you don't want to disclose how much BTC is your address holding to the person/entity that sells such good or service because they could easily look up your public address after you pay them on a blockchain explorer and see the funds... then how would you do this?

For example, you get paid in address A which has 0.1 BTC

You don't want to disclose you own 0.1 BTC to this person/entity, so you want to spend 200 USD on this good or service, which are like 0.004855 BTC at current rate.

How do you do this?

Should one download some of these "privacy wallets", create an address there and make a transaction with the funds you want to spend (0.004855 in this case) and then pay from that wallet's address? but the wallet has to have Android support for handheld usage then since I will pay once I arrive on the spot, not in advance.

Also, what about the fees? you lose money each time you send to the address that you want to spend from. This is problem. Also, exchange rate varies. You may send 0.004855 BTC to the new address you want to spend from, but this may be less than USD by the time you arrive (or more, but less imagine it's less)

I just don't know how to go about this, too many moving parts.

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[Charles-Tim]

It would have been easier if Electrum can get its own coinjoin which would have made this easier. But you can still make use of a mixer to mix the coin. Send some of the coins to a mixer and let the mixer send you mixed coin which you can use to spend in the restaurant.

Or make use of exchange like https://exch.cx/ to convert the bitcoin (that you want to use in the restaurant) to monero and back to bitcoin and use it for the spending.

You can also convert to monero and back to bitcoin on https://bisq.network/

[EL MOHA]

Also, what about the fees? you lose money each time you send to the address that you want to spend from. This is problem. Also, exchange rate varies. You may send 0.004855 BTC to the new address you want to spend from, but this may be less than USD by the time you arrive (or more, but less imagine it's less)

I just don't know how to go about this, too many moving parts.

Except conjoin I don’t think you can actually work it because the transaction will definitely get stored in a public blockchain and that cannot be hidden, if you try to send to another wallet address before sending to that of restaurant address then anybody that’s actually after that address information will still get it, because even if yuh use another wallet to send the restaurants the easiest way to find the main address information is to go though the the new address and see where it’s UTXO it is spending in the new transaction is actually coming from. Through the explorer one can easily see the amounts of the first wallet also, this is just more like a waste of transaction fee for privacy seriously. Better still if you’re wary of privacy in public places like this I will advice payment using fiat paper money

[Agbe]

If the restaurant is using Binance which I believe most of them might use. Then you have to send the potion or the unit of Bitcoin you want to spend at the restaurant to your Binance and when you reach the place and after eating then you ask the restaurant attendant to give you their Binance Wallet ID and not the Bitcoin address but the Binance Pay ID then you send the coins to the ID and that is all. And nobody can trace and know how much coins is in your country. And if that method can't work then I don't think there is any other way again because if you mix your coins to another wallet it will delay you. Because some mixers took the whole day to mixed, just like one I used the last time. And if you use mixer, you must have two Wallets, one for spending and one doe receiving and hodling. And the spending wallet, you won't keep much coins there since you don't want the restaurant attendants to know the total amount of Bitcoin in your wallet.

[Findingnemo]

For example, you get paid in address A which has 0.1 BTC

You don't want to disclose you own 0.1 BTC to this restaurant, so you want to spend 200 USD on this restaurant, which are like 0.004855 BTC at current rate.

How do you do this?

Electrum doesn't have a conjoin feature but a wallet like Sparrow does you can consider using that, especially for your day-to-day spending. The simple way to break your connection of origin and destination to to move funds to an exchange wallet and then withdraw it back to a wallet that is destined for use on day to day and you are not concerned about showing that balance and history to anyone.

[passwordnow]

There is no other way but to send that first to another wallet, that's how you're going to hide your address. So, before going to a restaurant, transfer it to a wallet where you'll use it for payments and leave the rest there. Only send the amount that you may want to spend for your ease. That's why if you're going to do this, you should have planned it before going out so that you're going to check the fees.

It's not ideal to do it at most times that you'll transfer here and there because the fees are not that worth it. But if they only cost some centavos, it's easier to do that and the fees won't matter at all.

If the restaurant is using Binance which I believe most of them might use. Then you have to send the potion or the unit of Bitcoin you want to spend at the restaurant to your Binance and when you reach the place and after eating then you ask the restaurant attendant to give you their Binance Wallet ID and not the Bitcoin address but the Binance Pay ID then you send the coins to the ID and that is all.

This is also a good suggestion, Binance Pay. An off chain transaction but of course, you'll have to deal with KYC and verifications.

[Churchillvv]

One thing I can tell you is convenience and privacy does not go together, you must choose one to follow. If you want privacy using Bitcoin as payment in a restaurant wouldn't work as expected because you have a lot of work to do before you can make a safe payment that can't be looked up. E.g Using mixers etc. and after mixing you will not have to move your coins back to the main wallet or the origin but a brand new wallet that will still require more expenses. So I will suggest you use other payment method for convenience than Bitcoin for $200 worth of food.

Privacy is expensive and takes alot of carefulness and time to get maximum privacy so you have to choose between privacy and convenience.

[SquirrelJulietGarden]

If the restaurant is using Binance which I believe most of them might use. Then you have to send the potion or the unit of Bitcoin you want to spend at the restaurant to your Binance and when you reach the place and after eating then you ask the restaurant attendant to give you their Binance Wallet ID and not the Bitcoin address but the Binance Pay ID then you send the coins to the ID and that is all. And nobody can trace and know how much coins is in your country.

Binance wallet ID, Binance Pay ID don't protect your privacy. This feature is for internal transfer and only can help you to save withdrawal fee from Binance.

It has nothing in protection on your privacy and you can not expect to gain privacy protection when you are using a centralized exchange and even KYCed there with your account. Both accounts of you and the restaurant are KYCed by Binance and the third company used by Binance for KYC processing. If government wants, they can ask your identity from Binance.

And there will be data breaches from Binance or the third party company, so your privacy is not protected.

[takuma sato]

There is no other way but to send that first to another wallet, that's how you're going to hide your address. So, before going to a restaurant, transfer it to a wallet where you'll use it for payments and leave the rest there. Only send the amount that you may want to spend for your ease. That's why if you're going to do this, you should have planned it before going out so that you're going to check the fees.

It's not ideal to do it at most times that you'll transfer here and there because the fees are not that worth it. But if they only cost some centavos, it's easier to do that and the fees won't matter at all.

If the restaurant is using Binance which I believe most of them might use. Then you have to send the potion or the unit of Bitcoin you want to spend at the restaurant to your Binance and when you reach the place and after eating then you ask the restaurant attendant to give you their Binance Wallet ID and not the Bitcoin address but the Binance Pay ID then you send the coins to the ID and that is all.

This is also a good suggestion, Binance Pay. An off chain transaction but of course, you'll have to deal with KYC and verifications.

I have changed the example of a restaurant and just said good or service. Obviously Binance Pay or whatever isn't the case here. And about sending the funds to another address, it wouldn't work.

Address A has 1 BTC
Address B is your own address that you generate and you send 200 USD worth to it to spend on the good/service upon arrival
The owner of the address that is selling this good/service is able to see that you had 200 USD and now it has 0, but can see that it received said 200 USD from an address that has 1 BTC. Of course, plausible deniability applies and cannot be proven you own 1 BTC, but if you go again to the same good/service provider in the future with a new address, they will see again that all these funds come from Address A. This doesn't look that great privacy wise.

[Ever-young]

I have changed the example of a restaurant and just said good or service. Obviously Binance Pay or whatever isn't the case here. And about sending the funds to another address, it wouldn't work.

Address A has 1 BTC
Address B is your own address that you generate and you send 200 USD worth to it to spend on the good/service upon arrival
The owner of the address that is selling this good/service is able to see that you had 200 USD and now it has 0, but can see that it received said 200 USD from an address that has 1 BTC. Of course, plausible deniability applies and cannot be proven you own 1 BTC, but if you go again to the same good/service provider in the future with a new address, they will see again that all these funds come from Address A. This doesn't look that great privacy wise.

Do you only want to spend from your electrum down to the service provider wallet ? If yes then you need to do all the privacy stuff before you get to the place you want to buy your goods or you want to exchange your bitcoin for any service.

Just as few others have suggested I will add to it by saying you will need to move some of those your bitcoin with extra fee to a non KYC exchange address where you can withdraw from this exchange to a different address were you can use later at any place were you will send directly to the place wallet.

Or better still just use a mixing service and get the coin detach from your original wallet where only you and the mixer will know the new wallet and were the holdings are originally from.

[Solosanz]

Split the coins into multiple wallets when you Coinjoin or mix your coins, so in case they want to track the coins, they can only see the multiple addresses, but they can't really assume if you're the one who control all the addresses.

To add more privacy you shouldn't tell your real names to the cashier and wear different outfit.

The problem when you're doing this is you need to spend more for fees, I don't think you really need to protect your privacy when it comes to offline trades because when spending $200 is normal in your country, you're just same like the others.

[hugeblack]

Electrum wallet was not designed to enhance privacy, so if you want to enhance it, you must connect via Tor only or use Electrum-Server^[1]  to ensure that no third party collects information about your addresses.
After that, use the coinControl feature to ensure that sending is from specific addresses and mix your currencies either in centralized ways, such as transferring them to Monero, using a mixer, coinJoin, or using a P2P crypto DEX like BISQ.

[1] https://electrumx.readthedocs.io/

[Synchronice]

If you get paid in BTC address you have on an Electrum wallet, and you want to pay for someone that sells a good or service in exchange of BTC, but for obvious reasons you don't want to disclose how much BTC is your address holding to the person/entity that sells such good or service because they could easily look up your public address after you pay them on a blockchain explorer and see the funds... then how would you do this?

For example, you get paid in address A which has 0.1 BTC

You don't want to disclose you own 0.1 BTC to this person/entity, so you want to spend 200 USD on this good or service, which are like 0.004855 BTC at current rate.

How do you do this?

Should one download some of these "privacy wallets", create an address there and make a transaction with the funds you want to spend (0.004855 in this case) and then pay from that wallet's address? but the wallet has to have Android support for handheld usage then since I will pay once I arrive on the spot, not in advance.

Also, what about the fees? you lose money each time you send to the address that you want to spend from. This is problem. Also, exchange rate varies. You may send 0.004855 BTC to the new address you want to spend from, but this may be less than USD by the time you arrive (or more, but less imagine it's less)

I just don't know how to go about this, too many moving parts.

It's better to ask similar questions on Development & Technical Discussion board, you'll get better answers there.
Let's touch our topic. First of all, keep in mind that for protecting your privacy, you should connect your Electrum to Tor before you make/broadcast a transaction because, when you use a lightweight version of Electrum or any other wallet, you are connected to other nodes and for security and privacy reasons, you should assume that they log your IP when you make a transaction, i.e. they know that there was a transaction made via you via certain Bitcoin address.
This is the basic step for your privacy when you use Electrum but as I see, the privacy that you want to achieve, is beyond Electrum's capabilities. For that, you should use Mixers or CoinJoin wallets but you still depend on how trustworthy mixer or coinjoin wallet developer is. Also, keep in mind that project being simply open-source doesn't mean it's 100% trustable, you should check the code or if you can't check the code, you have to rely on what other developers say.

Overall, Monero is a currency that you need if you want to save on fees, don't rely on 3rd parties and to achieve a maximum privacy.

[tranthidung]

Electrum wallet was not designed to enhance privacy, so if you want to enhance it, you must connect via Tor only or use Electrum-Server^[1]  to ensure that no third party collects information about your addresses.
After that, use the coinControl feature to ensure that sending is from specific addresses and mix your currencies either in centralized ways, such as transferring them to Monero, using a mixer, coinJoin, or using a P2P crypto DEX like BISQ.

[1] https://electrumx.readthedocs.io/

Use Electrum wallet with Tor to enhance Privacy.

Using Electrum through Tor
Tutorial: How to use Electrum wallet (for advanced users)

[Mia Chloe]

Well if we are talking about privacy here I will say the best choice is an HD wallet.
In my opinion if I was the one in such situation I would simply use a mobile wallet like mycelium since I would be spending that $200 mycelium can easily mask your wallet balance since it would generate another wallet using your master key.

[SquirrelJulietGarden]

Well if we are talking about privacy here I will say the best choice is an HD wallet.

HD wallet is not enough to secure your privacy. You need more than a wallet to secure your privacy.

Coin Join, Tor connection and good practice with your inputs, outputs and don't reuse your address.
Some advice for privacy from Blockchair.com

Privacy

[TravelMug]

Electrum wallet was not designed to enhance privacy, so if you want to enhance it, you must connect via Tor only or use Electrum-Server^[1]  to ensure that no third party collects information about your addresses.
After that, use the coinControl feature to ensure that sending is from specific addresses and mix your currencies either in centralized ways, such as transferring them to Monero, using a mixer, coinJoin, or using a P2P crypto DEX like BISQ.

[1] https://electrumx.readthedocs.io/

Use Electrum wallet with Tor to enhance Privacy.

Using Electrum through Tor
Tutorial: How to use Electrum wallet (for advanced users)

I think the OP's dilemma is not about Electrum being used with Tor.

From what I understand, it's how someone, it the given, the restaurant can follow his Bitcoin address that has 1 BTC in his example,- 200 USD or equivalent in Bitcoin. So Electrum is not the best wallet to do that since it doesn't have conjoin capability.

So I'm just thinking that he can used a 3rd services that washes everything (and we all know what it is, and currently ban from our forum),  but might be costly to him, before he pays for the services.

[DannyHamilton]

If you get paid in BTC address you have on an Electrum wallet, and you want to pay for someone
- snip -

For example, you get paid in address A which has 0.1 BTC

You don't want to disclose you own 0.1 BTC to this person/entity, so you want to spend 200 USD on this good or service, which are like 0.004855 BTC at current rate.

How do you do this?
- snip -

First of all, you should always use a new address for EVERY transaction you receive.

So, if that 0.1 BTC was received as 5 separate payments of:

• 0.0301 BTC
• 0.0039 BTC
• 0.0408 BTC
• 0.0019 BTC
• 0.0233 BTC

Then you can just use the two smallest outputs (0.0301 BTC + 0.0019 BTC = 0.0058 BTC) to fund your transaction. In this way, the entity will see no link at all to the three larger outputs under your control.

Or, if you prefer, you could use just the 0.0233 BTC output to fund the transaction, significantly reducing the visibility from the full 0.1 BTC to just 23% of your balance.

Now, if you have only ever received a single transaction, and the amount of that single transaction was 0.1 BTC, then maintaining privacy of that balance will be more difficult.

If you're willing to pay repeated transaction fees over many days/weeks/months/years to gain some privacy, one thing you could do to increase your privacy a bit would be to generate a random time and then after waiting that amount of time from receiving your initial transaction create a new transaction to split your balance by a random percentage and send each portion to a new addresses in your wallet. Then after another random time, chose one of the two outputs randomly, and split that to 2 new addresses. Then after another random amount of time, chose one of the three outputs in your wallet and split that to 2 new addresses, and so on until you have several random sized outputs all created at random different times from random earlier outputs.  This will make it much more difficult for the entity to distinguish between outputs that you still control.

If you're only trying to maintain privacy from one particular entity, and you don't mind another entity knowing about your larger single UTXO, you could briefly send your 0.1 BTC to a popular entity that pools the bitcoins they receive (such as an exchange or a gambling website). As an example, let's assume you use Coinbase. Then you could withdraw random percentages of the 0.1 BTC, each to a separate address in your wallet. It would become extremely difficult for the entity you are trying to maintain privacy from to determine which of the many, many outputs Coinbase sent were sent to addresses of yours vs. addresses of other people.

Another option might be to use an intermediary (friend?, family?, etc) that you aren't concerned about knowing how much BTC you have in the transaction you received.  You could make an arrangement for the intermediary to make the payment on your behalf, and then later you could send a payment amount to the intermediary at a new address compensating them for helping you.

There are probably more options, but those are the few that come immediately to mind.

Note: if the entity you are trying to maintain privacy from is a government entity, it's possible that some of these processes to hide the source of funds might be considered "money laundering" by some governments. This may be illegal in somme jurisdictions, and you may need to talk to a lawyer to make sure that you're not doing anything that could be charged as a crime.

[takuma sato]

I have changed the example of a restaurant and just said good or service. Obviously Binance Pay or whatever isn't the case here. And about sending the funds to another address, it wouldn't work.

Address A has 1 BTC
Address B is your own address that you generate and you send 200 USD worth to it to spend on the good/service upon arrival
The owner of the address that is selling this good/service is able to see that you had 200 USD and now it has 0, but can see that it received said 200 USD from an address that has 1 BTC. Of course, plausible deniability applies and cannot be proven you own 1 BTC, but if you go again to the same good/service provider in the future with a new address, they will see again that all these funds come from Address A. This doesn't look that great privacy wise.

Do you only want to spend from your electrum down to the service provider wallet ? If yes then you need to do all the privacy stuff before you get to the place you want to buy your goods or you want to exchange your bitcoin for any service.

Just as few others have suggested I will add to it by saying you will need to move some of those your bitcoin with extra fee to a non KYC exchange address where you can withdraw from this exchange to a different address were you can use later at any place were you will send directly to the place wallet.

Or better still just use a mixing service and get the coin detach from your original wallet where only you and the mixer will know the new wallet and were the holdings are originally from.

I don't want to use any mixing services anymore. What if this happens:

1) You mix the coins
2) You get the coins back
3) You pay this person/company for some good/service
4) This person/company puts the coins into an exchange and Chainalysis or something gets triggered
5) This person/company now has a problem, and will point to you as the source of this transaction
6) Suddenly you have a problem when all you wanted to do is to get some reasonable privacy during a payment

Yo yeah, not using any mixers, at least for payments that would identify me in any way. For instance, to pay for some online service like a VPN it's reasonable since you aren't doxed, but why risk it when you are paying IRL?

This is why perhaps these coinjoin wallets are worth looking into if they deliver any information

The non KYC exchange may be a solution tho. Do you know which ones are worth using?

The thing is, you are just wasting a lot of money along the way with transactions.

[bettercrypto]

If you get paid in BTC address you have on an Electrum wallet, and you want to pay for someone that sells a good or service in exchange of BTC, but for obvious reasons you don't want to disclose how much BTC is your address holding to the person/entity that sells such good or service because they could easily look up your public address after you pay them on a blockchain explorer and see the funds... then how would you do this?

For example, you get paid in address A which has 0.1 BTC

You don't want to disclose you own 0.1 BTC to this person/entity, so you want to spend 200 USD on this good or service, which are like 0.004855 BTC at current rate.

How do you do this?

Should one download some of these "privacy wallets", create an address there and make a transaction with the funds you want to spend (0.004855 in this case) and then pay from that wallet's address? but the wallet has to have Android support for handheld usage then since I will pay once I arrive on the spot, not in advance.

Also, what about the fees? you lose money each time you send to the address that you want to spend from. This is problem. Also, exchange rate varies. You may send 0.004855 BTC to the new address you want to spend from, but this may be less than USD by the time you arrive (or more, but less imagine it's less)

I just don't know how to go about this, too many moving parts.

Why should you pay him in bitcoin when you can pay him with other alternative altcoins? After all, you don't want other people to know your total bitcoin balance in the wallet address to be used, which can be seen in the blockchain explorer.

It's impossible that you don't know that bitcoin is not the only cryptocurrency that can be paid to other people. I can understand you if Bitcoin is the only crypto in this industry. That's why there are many options like Ethereum, BnB, Matic, USDT, and others that can be paid online.