How to choose an anonymous bitcoin wallet: a guide for users

To use cryptocurrencies without revealing your real IP address, it is not enough to enable a VPN, you need an anonymous cryptocurrency wallet. In the article we will tell you how to choose the right product for your business, as well as explain why cryptocurrency is non-anonymous a priori, and VPN does not protect privacy. 

Privacy protection

In 2014, scientists from the University of Luxembourg developed an effective technique for de-anonymizing participants in crypto transactions. In order to obtain IP addresses of users, it is necessary to place many of their own nodes around the world. Connecting to a node, the computer always reveals its address. Thus, hackers large companies and states get the data they need. 

VPN changes the address, but the owners of these services provide information about their users at the first request of state regulators of the countries where their servers are located. Tor is not suitable for working with cryptocurrency, as nodes block such connections and do not confirm transactions. 

Privacy is especially important for business, and to preserve it, you should use an anonymous bitcoin wallet, such as BitHide. It implements a unique technology Dark Wing, a synthesis of Tor and VPN, the latter provides synchronization, and the former reliably hides the real IP address. With this technology, the node gets a thrice changed address, to find out the real one, you need god’s help.

On BitHide’s privacy guard is also its non-castodiality. The product is a software that is installed on the client’s own server. Thus, data about all transactions are the property of the wallet owner, third parties will not be able to use them. In addition, when work is done on a server controlled only by the client, he can independently decide whether his customers need KYC-checking. 

Built-in AML verification of the cryptocurrency wallet

This is an important point arising from anonymity. A business may “not know its customer,” but it needs to know how risky cryptocurrency is coming to it. BitHide, for example, has a built-in AML verification feature. It can be used to quickly find out how many high-, medium-, and low-risk assets are at an address. 

Ownership of the seed phrase

The user is only the true owner of his assets when he receives a mnemonic phrase. Otherwise, third parties can cut off his access to coins at any time. That’s why you can’t store assets in the private accounts of exchanges, for example. Make sure that the anonymous crypto wallet you are considering to use is planning to issue you a seed phrase.

Conclusion

A wallet will securely protect your privacy if it:

Uses a special technology to hide the real IP address, such as Dark Wing;

is non-castodial, installing software on the client’s own server; 

gives the user a seed-phrase. 

It is also important for businesses to pay attention to whether there is a way to quickly check funds for riskiness.