Are bitcoin transactions secure? Are they anonymous?

Since the first white paper on blockchain technology came out in 2008, bitcoin and other cryptocurrencies have been marketed as anonymous and private transactions. But just how secure and anonymous are crypto transactions?

Because cryptocurrency lets people send money directly to each other over the internet, the idea is that there are only two people involved. Banks, governments, or intermediaries aren’t required. Even though this seems to set up the perfect framework for privacy and anonymity, busts and other events show that crypto transactions are not as private and anonymous as they seem. If you want to start your Bitcoin investment, visit this officiële website and increase your knowledge accordingly.

For example, a Manhattan couple was arrested earlier this year for money laundering. Bitcoin worth $3.6 was confiscated from them. The money laundering was connected to a hack on Bitfinex, a Hong Kong cryptocurrency exchange that occurred in 2016.

Law enforcement agencies traced the criminal activity to an extent where they even followed stolen bitcoin through a network of international transactions. Authorities caught them up after six years. Recent research has shown traceability through random patterns in bitcoin’s transactional data — the more significant a data set, the more patterns appear. Where patterns can be identified and traced.

The idea of private and end-to-end encrypted transactions doesn’t seem to exist anymore. Bitcoin has become more dependent on the involvement of mainstream investors. The fact that bitcoin transaction activity can be easily traced, like in the Manhattan arrest, doesn’t let it be anonymous.

Are bitcoin transactions secure?

Bitcoin is public, cryptographic, and permissionless without any decentralization. Moreover, bitcoin is built on blockchain technology. To be more specific, blockchain consists of blocks. These blocks contain unique and validated transactions which are impossible to modify. Blockchain uses complex mathematical hash puzzles to provide an individual authentication to each transaction. 

Blockchain is protected by 256-bit SHA hash functions. Banks, the military, and virtual private networks (VPNs) use the same technology to encrypt their systems. But unlike encryption, which can be broken, SHA hash functions give each transaction a unique fingerprint that can’t be modified.

It can be said that blockchain’s security depends upon consensus. One must have about 51% of the mining capabilities to hack into the blockchain, which is almost impossible. However, the wallets you use to store the cryptocurrency aren’t as secure, but that’s a different story.

Are they anonymous?

As stated earlier, the idea of bitcoin was presented to promote anonymity. Peer-to-peer transactions allowed the information to stay only between the two parties involved.

However, crypto transactions are now being termed pseudo-anonymous instead of anonymous. It’s because all the transactions taking place in and out of the wallet are verified and recorded on the blockchain, which is public. Moreover, the existing addresses of wallets can also be traced.

As a result, this anonymity game poses questions like, is bitcoin even safe? You’ll be relieved that bitcoin is one of the safest payment methods. Although government agencies might sometimes need access to blockchain data to identify a person, it is done through alternate methods to direct hacking. One of the most commonly used indirect methods is password phishing.

Though bitcoin may provide access to your personal information, it doesn’t give any access to your crypto wallet address. However, there’s still a possibility of tracing down the transactions back to your wallet. 

The bitcoin trading software is notable for automatically swapping cryptocurrencies with other traders, which helps them take advantage of currency value changes. Investors can also easily keep track of current prices and trade currencies whenever they want to.

A few illegitimate methods used by hackers and agencies to hack the bitcoin or crypto wallets include the following.

Fake websites and Phishing attacks

These are the most commonly used tools when it comes to hacking. The user may be tricked into providing their personal information and wallet details through fake websites, spam emails, or even messages simply by asking you.

Malware

Crypto mining malware may force you into mining crypto for a hacker. The trick is to watch out for malware stains and malicious code that revolve around crypto wallets and can access your wallet.