Many crypto enthusiasts claim cryptocurrency transactions are anonymous. There is no way to find out who you are sending or receiving funds from.
Therefore, anything you buy or spend money on should also stay anonymous. No one should be able to discover what you spend on betting on Bet Way and other apps.
Is that true? Is your identity always protected when using crypto?
Let’s explore.
Is Cryptocurrency Anonymous?
A cryptocurrency transaction is carried out between two parties. There is no bank or intermediary involved in the process.
As a result, you may only know the wallet address of someone you are sending money to. Consequently, the receiver will see the wallet address of the payee.
The government or authorities have no way of identifying the parties.
The above holds true in theory. This is because cryptocurrency transactions are peer-to-peer transactions with two parties.
However, every crypto transaction is recorded in a public ledger. Each crypto coin, like Bitcoin or SOL, maintains a ledger to record transactions.
You can view these records publicly using a blockchain browser. Therefore, anyone can see the amount, time, and date of the transactions.
However, these records don’t reveal your identity.
How Crypto Transactions can be Traced
You can protect your identity as long as you don’t encash your crypto coins. To do so, you will have to approach an intermediary that will ask for your KYC details.
Every customer must pass KYC before they can convert crypto to cash. It applies to all crypto exchanges registered under a country.
Therefore, your identity is revealed, along with your banking information. You will also create a paper trail that is very easy to follow.
Recently, the world is witnessing a rise in crypto crimes. Criminals are using cryptocurrencies to launder money or fund illegal activities.
As a result, governments have invested heavily in technology to trace crypto funds. They are highly effective and can work at a commendable level of sophistication.
Therefore, the use of crypto for illegal activities is diminishing. Law enforcement officers can trace illicit crypto payments with improving accuracy.
They may only need some time to come out with the results.
Should You be Worried?
An average person shouldn’t be worried about identity issues while using cryptocurrencies. It is a safe and secure mode of payment for legal purchases.
As a result, many online casinos accept crypto payments.
Criminals are the ones worried about revealing their identities. They don’t want anyone to know they are laundering or funding terrorists.
Law enforcement will be after the criminals, not you, an average person.
However, you should protect your crypto funds and use a physical wallet if necessary. Use a VPN to buy and sell crypto coins to protect your data and privacy.
Final Thoughts
Cryptocurrency transactions are not 100% anonymous. However, the general public will not be aware of your identity. Cops and hackers may be able to trace your trail and identify the owner of funds. You shouldn’t be worried as long as you use your money for legal activities.
Interesting Related Article: “What is Cryptocurrency and What Is it Used For?“