Most people, when they think of Bitcoin, imagine an anonymous, decentralized digital currency. However, this is not the complete picture because even though it is portrayed as anonymous and untraceable, it is not always so bulletproof. Many people use this so-called 'untraceable' nature of Bitcoins negatively to keep people away from using this decentralized currency. They propagate that it is generally used by criminals to conduct illicit activities.
It is not always so, and Bitcoins are used by many people all across the world as even though it is not as anonymous as you mainly get to hear from most sources, it is still a safer method of online payment as it is 'pseudonymous.'
Safe but not absolutely hidden
There is a reason why most people are confused about the anonymity of using Bitcoins. Most people think that since it is a decentralized currency without having a third party acting as a verifier, it must help people remain completely anonymous.
Most people think that since it is a decentralized currency without having a third party acting as a verifier, it must help people remain completely anonymous.
However, this is where Blockchain comes in. The lack of a third-party verifier does create a problem. That has to be a way to ensure that the user is not spending the Bitcoin they have previously transferred to another party and avoid 'double-spending.'
Generally, third parties between a buyer and seller take care of this process. This is now done using a blockchain, a public distributed ledger, when every transaction is recorded.
This is a permanent record, and all transactions made using Bitcoin are found there. This means that anybody can access it at any time as it is a public record.
However, the transactions are also encrypted. This makes things a little tricky, and this is done using public-key cryptography that helps in masking the sellers' identities and the buyer. For this reason, it is better to call Bitcoin pseudonymous rather than anonymous. For each Bitcoin transaction, users are given digital keys, a public key, and a private key that can be used to unmask that identity at any point in time.
Not untraceable but challenging to find out
The permanent record created by blockchain technology sold by now makes you understand that Bitcoins' claims are untraceable are false. Even if your identity is hidden using the keys, every transaction you make will be stored in a permanent record and can be traced back to you if hackers or law enforcers want to.
A lot of malicious individuals have been captured while partaking in illicit transactions using Bitcoin. It is not always easy, and there are always loopholes that people can exploit to increase the 'pseudonymous' status.
Like there is even special software like mixers that can help break down Bitcoins into smaller transactions. The software then mixes the smaller amounts with other transactions made by other people so that it is difficult to trace the identity of the people behind the transactions.
It all depends upon the technological competence of the people who are doing the transaction, as using Bitcoins is not for everyone.
Most cryptocurrencies that claim to be completely anonymous are not entirely endorsing the truth. Understand how cryptocurrencies in general and Bitcoin in particular work; then only you should decide to use Bitcoins.
Sites like the Bitcoin Era can be your window to the world of the 'pseudonymous' nature of Bitcoins to make money. However, you have to keep in mind that handling and making money with cryptocurrencies is not for everybody, and it may take some time for you to hone your Bitcoin trading skills. However, stick to your goal and develop the proper skills. You can make money by Bitcoin trading, which is the most accessible form of generating profits using this decentralized currency.