The Complete Guide to Bitcoin Anonymous Use

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In one of our previous articles, we talked about the not quite complete anonymity of Bitcoin.Since then, it has often beenReceived letters requesting a detailed explanation of how to use Bitcoin anonymously on the Internet. So, we present to your attention a complete guide to the anonymous use of Bitcoin online.

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Why stay anonymous?

Increased privacy reduces risksto attract the attention of criminals and undergo a hacker attack or fraud. After mastering these techniques, their distribution will significantly increase the resistance of the Bitcoin network to various aggressors. Its blockchain is built on the basis of unshakable cryptography, which prevents counterfeiting and other types of fraud, but the human factor in bitcoin transactions is always a “weak link”.

Although you will never need to confirmthe identity for downloading and using the Bitcoin wallet, for the average user, this is where anonymity ends. As soon as your Bitcoin address becomes tied to a real person - which cannot be avoided if you are engaged in business or receive delivery - your anonymity for this particular address becomes compromised.

Using an online alias (e.g. SatoshiNakomoto) will improve your privacy; however, remember that an experienced detective will be able to identify you through a standard Internet connection. Most bitcoin wallets distribute your real IP address, which can then be easily associated with your bitcoin addresses.

Bitcoin, as it is by default, should never be considered an anonymous (or sufficiently private) monetary system.Bitcoin's pseudonymity isn't bad at best; but if you want to, she can easilyBitcoin "as is by default" is still much more private than credit cards, but it's a far cry from cash.This state of affairs raises a number of questions regarding its privacy for businesses and individuals.

Since all transactions on the Bitcoin network are in the public domain, any address that is associated with your identity and/or company opens4 important pieces of information:

How many bitcoins did you have or have at this address;
When exactly did you get bitcoins;
From whom did you receive these bitcoins (in case the senders did not use effective methods of anonymization);
Another address to which you send these bitcoins (which, as in paragraph 3, can potentially identify its owner).

For those concerned about privacy, these words sound sad. But the situation is actually even worse ...

Now, despite the presence in bitcoin wallets withWith the coin control function of the ability to send coins from a manually selected address (more precisely, an unspent output, or UTXO), a bitcoin wallet arrives with change in such a way that it leads to the possibility of accurately linking several addresses from one wallet to each other. As a result, one of your disclosed addresses can "merge" information about your other, "unknown" addresses.

And although some Bitcoin Core developersworking to improve privacy in the Confidential Transactions Project, at this stage, truly anonymous use of Bitcoin requires knowledge and some effort.

It's never too late to become anonymous

First, let's assume that all addresses inyour bitcoin wallet, one way or another, can be tied to your real personality. If you bought coins on the stock exchange with mandatory identity verification procedures or were engaged in business under a real name, this is most likely the case. The good news is that your privacy can be partially or completely restored from its current deplorable state. Read on ...

Online security is usually characterized ascompromise between efficiency and convenience. It is up to users to choose which side they want to be on. This will allow them to later understand how much time, effort and money to spend on improving Bitcoin's privacy.

This guide offers several methods to improve your financial privacy in Bitcoin, starting with simple techniques and onwards, to more effective but time-consuming methods.

One Simple Recommendation for Improving Bitcoin Privacy

Whenever possible, avoid repeatinguse of addresses. Generate a new address for each transaction you intend to receive. There is little point in updating static addresses, such as donation addresses left on social media, but in almost all other cases it is recommended to constantly change the addresses.

Attention:If you are using a non-HD wallet like BitcoinCore, remember that only 100 addresses are contained in the initial key pool created from your wallet's private key. Always make backups or follow the link above to learn how to increase the maximum key pool size.

Improving Your Online Privacy

If you access the Internet from the same deviceor the computer from which you use Bitcoin, you will definitely want to improve your level of protection. The Prism-Break information site provides a list of recommendations for various operating systems and devices.

At a minimum, consider installing ad blockers and JavaScript, as well as refusing cookies (or cleaning them regularly). HTTPS Everywhere is a good option.

When choosing software related to security / personal data / encryption,provenOpen source solutions are a priority.

Password management

Passwords that people remember are usually weak. This problem and its solution are best demonstrated by the following webcomic by XKCD:

Using your own option fromfour words (correct, horse, battery, staple — in the example above) on different accounts can be depressing from the point of view of security and privacy; one compromised account can give away all your passwords for mail, bitcoin exchange and other important accounts. Trying to remember different passwords for dozens or even hundreds of accounts is a recipe for disaster!

The solution is to use a good password from random words, as well as a password manager, like KeePassX or Password Safe.Password managers create strong, long, and random passwords that you don’t need to remember; the program stores them in an encrypted format. Your passwords become available only when you enter your single master password into the manager.

We mask your IP address using the Tor network

Visit TorProject.org to download and install TOR (also known as Onion Router). Tor is a standalone Firefox-based browser that disguises your real IP address. At work, it redirects your connection through several other computers connected to the network. The final effect is that no matter what website you visit, your request will be visible as coming from a completely different PC, usually in another country.

Even though it masks the IP address andsome potentially user-identifying browser characteristics, Tor cannot be considered a definitive solution. Using your real name, visiting your email, or logging into social media via Tor will have exactly the same de-anonymization effect as using a regular browser for such activities. One solution is to create a separate email account on the darknet to work with Tor, such as Mail2Tor.

Tor turns off all javascript by defaultvisited sites; some sites will not display correctly when Java scripts are disabled. However, their inclusion may pose a potential threat to your anonymity.

Tor allows you to access the so-calledThe “darknet” is a separate layer of the regular Internet (darknet users often call the Internet the “clearnet,” i.e., the “pure network”). The darknet is only accessible via .onion links. Such links contain seemingly random, difficult-to-remember characters; It makes sense to get into the habit of saving links to original sites in a notepad in order to avoid falling into phishing sites.

To make it easier for you to start usingTor browser and darknet, you can see a separate article "Access to Darknet in less than 2 Minutes." Once you surf the Internet through Tor, you can explore Internet anonymity further without unnecessarily worrying about prying eyes.

You can also visit The Hub forum.containing many interesting instructions for using the clearnet, the darknet and the anonymity of Bitcoin. There is a lot of relevant information in the attached topics in the “Beginners” and “Security” sections. Jolly Roger's topic "Safety for Beginners" will be partly useful. To access The Hub's dark web forum, follow the .onion link:

http://thehub7gqe43miyc.onion/

Attention: do not access the LocalBitcoins website through the networkTor There is evidence of attacks during which the phishing output nodes of the Tor network send you an invalid version of the site, thus receiving your username and password.

Launching Bitcoin via Tor

Starting with release 0.12, the Bitcoin Core client will automatically go through the Tor network if it detects it is installed on your PC. To make your wallet behave this way, follow these instructions on GitHub. Here are some more tips with Reddit. Most other wallets are also able to connect via Tor, usually these settings are described in the documentation.

Since the addresses are in your existing walletmay be tied to your IP address and/or identity, consider installing a new wallet that only connects to the network via Tor. Before launching your wallet, turn off your Internet connection and configure your new wallet to use the Tor network exclusively. Then, you can restore your internet connection and allow the wallet to sync. If you are using a full wallet, copy the current block folder (seedo not copythe folder with the file wallet.dat!) into the folder with the data “Tor wallet” will significantly speed up the synchronization process.

Direct Bitcoin Transfer From Your OldThe wallet in this new one will make the owner of the coins more anonymous. However, there are much more sophisticated transfer methods (which we will discuss below) that will be more effective in hiding cash flows.

(Optional) Join the Virtual Private Network (VPN)

As mentioned, Tor is not a panacea forprivacy sphere; an intermediary who owns both the first and the last machine in the tunnel through which you connect to the Network will be able to find out your IP address, as well as get a surfing log: specific pages of visited sites, downloaded files, and so on.

If you want to pay a few dollars fora restful dream, we suggest using VPN services. Instead of connecting to the Internet directly, your connection will be redirected to the VPN server network. Recently, the article “A Beginner's Guide to Configuring a VPN” has been published if you want to learn more about the subject.

VPN can boast about the samebenefits, like Tor; in fact, most VPN providers allow you to change the nationality of your IP address (which can be useful if you need to get to sites that are not accessible from your home country, or bypass government blocking of your home sites). Also, VPNs offer security benefits; they shield your computer from malware through firewalls and proxies.

Unlike the situation when some sitesthey block access to themselves for well-known nodes of the Tor network; VPN allows you to circumvent such restrictions, as well as expand the channel bandwidth. It is possible to enter the Tor network through a VPN to create an additional layer of obfuscation.

Disk encryption

Traces of your activity on your hard drive orUSB drives left unattended jeopardize your anonymity. Disk encryption programs can help you encrypt a file, folder, or even an entire virtual disk so that it cannot be accessed without a password. It's a good habit to encrypt your wallet.dat file, as well as any important information on your hard drive. With decent disk encryption software, you can create multiple, secure backups of your most important files and data, copy them to a USB flash drive, and more.

Search the Web for Software Review Articlesencryption, you can start with this wiki. Do not trust the BitLocker program that is built into Windows. Unlike open source alternatives, its safety has not been proven.

Warning:if you lose or forget your password, you will lose access to any encrypted files.

We mask transactions in bitcoin

Passing coins through mixers

The name itself hints at the essence.Mixer — a service for mixing unrelated bitcoins in such a way that it is difficult to determine which addresses sent funds and to whom. This is a good way to move coins from an old, de-anonymized address or wallet to a new, more private one.

For privacy reasons it makes senseuse only services like the exchanger analyzer KursExpert: https://kurs.expert, as well as Darknet mixers like Bitmixer.io: http://bitmixer2whesjgj.onion/, or Grams Helix: http://grams7enufi7jmdl.onion/helix/. BitMixer works quite quickly, but sending coins to Helix will require a wait of several hours (if you prefer not to completely trust these services and you have an impressive amount, send coins in parts). The bad thing about using mixers is that you have to trust the service with your coins until the mixing is completed, which comes with the risk of a “trusted person.”

Decentralized mixing method withoutthe need for trust can be found in JoinMarket; The implementation of technology to improve privacy was first proposed by Bitcoin Core developer Greg Maxwell. The infographic below shows an accurate explanation of JoinMarket's operating principles. Despite the fairly simple principle of operation, at the current stage of development, JoinMarket is a more complex mechanism than sending coins to the mixer site.

If you understand Bitcoin well and are ready for morea practical method, you are highly recommended to use JoinMarket. In addition to giving you complete control over the mixing process, it also reduces your risks and transaction fees. JoinMarket even allows you to earn some money by helping others mix transactions.

Ending the Trail with Altcoin Changer

Why Stop at Just Sending Bitcoinfrom one address to another? Mixing Bitcoin and privacy-focused altcoins provides an additional layer of secrecy. This method will likely require a little less trust than centralized mixing services.Perhaps Monero (XMR) is the best altcoin for such an operation.

Here's a quick guide to help you.learn how to buy Monero using Bitcoin; to hide your bitcoins, simply convert them to XMR, then send them to a new Monero address that belongs to you, and then convert the coins back to new, anonymous bitcoins.

Two sites well suited for conversionBitcoin and Monero cryptocurrencies into each other: ShapeShift.io and XMR.to. Do not forget to visit them through Tor and do not worry about the need to register: no site will require it.

And Finally: The Amnesic Incognito Live System (TAILS)

If you are serious about your privacy,you will want to use all of the above methods at once, in one protected operating environment. Unfortunately, standard operating systems do not have end-user privacy as a priority. For example, Windows 10 is relentless in its efforts to keep track of you. Thus, it makes sense to boot into a secure, privacy-respecting operating system. And only then you can try to send bitcoins really anonymously.

The best option here is to use TAILS,which by default leaves no trace and is based on the Linux Debian distribution. Do not worry about the fact that you have never used Linux before; TAILS has an integrated interface very similar to Windows or Mac. There is even a function where the OS completely mimics the look of Windows, so third-party observers will not notice anything unusual in the way you use your computer!

TAILS includes privacy, security andencryption in such a small package that it can be placed on a USB stick - and besides this, the KeePassX password manager as well as the lightweight Electrum bitcoin wallet are built into TAILS by default.

To boot into TAILS when your computer starts,your USB drive must be formatted as bootable, for this use programs like Universal USB Installer or Rufus. TAILS must be downloaded and installed on USB, which is an important accompanying process. Please note that installing and maintaining TAILS in its updated form will require 2 similar USB devices.

If you want to get started with TAILS, you can use this simple online instruction.

Changing BIOS Settings to Boot TAILS from USBinstead of a hard drive will allow you to safely use untrusted computers and public networks. Thus, it is possible to anonymously send bitcoins even from a public computer that is under surveillance — for example in a library or Internet cafe — without leaving information about personality and activities.

Although TAILS can easily cope with any viruses,recording session data, he will not be able to resist keyloggers or secretly create screenshots executed at the hardware or bugs level. Fortunately, TAILS contains a virtual keyboard and other mouse-driven text input applications. To enter passwords using an untrusted device, it is recommended to combine password entry using the on-screen keyboard using countermeasures against logging.

TAILS does not store any information regardingthe programs you use, the sites you visit (via the built-in Tor browser), or any other information. However, TAILS allows you to create an encrypted, permanent virtual disk on your USB flash drive (if there is enough free space; an 8-gig flash drive is recommended).

Any data that is stored on this persistent virtual disk will be able to be stored and changed from session to session. It is recommended to store a file with data from the password manager and seed (a seed) from Electrum in a password manager (well, maybeyou are absolutely sure that you can remember it). Entering this seed key will allow you to restore your Electrum wallet after installing it from scratch — with access to all bitcoins stored in it.

Attention:If you cannot save in a safe place or remember a seed key, all your bitcoins will be irretrievably lost immediately after the end of the current TAILS session.

Anonymity has a price.

Only you decide what level of anonymity youwill arrange. The more anonymous you want to be, the more effort you will have to make to achieve this. This article presents the basic tools and techniques, a combination of which will allow you to choose the level of anonymity that is best suited for you.

: 99bitcoins.com