Privacy in bitcoin

Now, we know bitcoin is a decentralized digital currency. No central party is managing bitcoin. Information of every account is accessible to every node which can be run by everyone on earth. The problem is you don’t want everyone on earth to know how much bitcoin you have.

To protect the privacy, instead of using my actual name as an account identifier, a randomly generated code is assigned to each account. The code is called bitcoin address. You can treat it as a bank account number. All the information of an account is linked to the bitcoin address. Unless you tell others you own a particular bitcoin address, nobody can know the true identity behind that address. That’s why bitcoin is also referred as an anonymous currency.

Although many transactions from the black market are done through bitcoin network, users without enough computer networking knowledge can hardly hide their identity from everyone when they obtain bitcoin. The most common way to get bitcoin is to purchase from an online exchange which requires your ID card and home address proof to open an exchange account. That means you cannot buy bitcoin anonymously. Yet, don’t feel sad. You could still buy it from the bitcoin ATM which does not need you to provide any personal particulars. But remember: wear sunglasses and the mask to go there as many CCTVs are installed around the ATM!!!