Why Bitcoin Isn’t Anonymous?
PowerKee’s Bastion of Privacy #26 – Bitcoin’s lack of privacy and an attractive alternative
Bitcoin revolutionized digital money when it’s proof-of-work powered blockchain in 2009. In the early days, Bitcoin transactions were also considered to have a high degree of anonymity but such anonymity has been quickly disintegrating as sophisticated blockchain analysis tools proliferate.
In the latest Bastion of Privacy, we examine the privacy limitations of the Bitcoin blockchain and detail how recent developments are being implemented to improve Bitcoin’s privacy assurances. We also highlight the emergence of privacy blockchains and detail the benefits they hold over Bitcoin.
Development Update:
Our newly hired QT Developer is making great progress with the implementation of the PowerKee Design into our fully functional wallet. We tested the wallet including the new design already and aiming on having this last step completed end of this month. We’ll deliver a fully functional, native, well designed, super secure, privacy eco-system. Be ready for a privacy revolution. Beta-Tester can sign up next week.
How Anonymous are Bitcoin Transactions?
Bitcoin occupies the prime position in mainstream consciousness when it comes to cryptocurrencies. It was the first cryptocurrency to be launched into existence and it has always been at the forefront of developments in the blockchain world.
Mainstream media oftentimes mistakenly represents Bitcoin as a network that facilitates anonymous transactions. This is true to only a small extent. Bitcoin users must go to great lengths to ensure their anonymity. Significant advancement in the field of blockchain analysis tools gives a wide variety of sophisticated tools to enterprises and governments who wish to uncover the identity behind Bitcoin transactions.
On custodial platforms, it is even more straightforward. To stay afloat of regulation, these platforms require that users undergo KYC. This clearly connects the identity of the user of the custodial with any address that they interact with. Before you know it, a wide web of uncovered identities is linked to Bitcoin addresses and it becomes easy to pinpoint the people behind transactions.
Bitcoin Changes Improve State of Privacy
New layers and code are being implemented in the Bitcoin blockchain which are improving the ability to remain anonymous while transacting with Bitcoin. One such change is the Taproot upgrade which is in the process of being implemented via a Bitcoin soft fork. It is a part of a combination of three Bitcoin Improvement Proposals (BIPs) that target technical changes in the protocol. This radically improves the state of Bitcoin when it comes to both privacy and smart contracts.
These improvements on Bitcoin bring momentum to the imperative of ensuring anonymity while transacting across decentralized networks. Growing risks in cybersecurity and the need to protect assets and individual data have further encouraged privacy improvements. It has also motivated the creation of blockchain networks that are primarily focused on delivering privacy and data protection when it comes to online transactions.
PowerKee is one such privacy network. The native token of the network, KEE, can be transferred cheaply and instantly in a completely anonymous manner. The protocol is built with privacy in mind, unlike Bitcoin where privacy enablement requires jumping through significant holes.
Privacy Blockchains Will Enforce Users’ Rights
Privacy of financial transactions is a right which many netizens take for granted. However, they’re a growing number of risks associated with the abuse of this right. Governments and enterprises are becoming more invasive with user data while cybersecurity risks are on the rise.
Bitcoin fails to provide the privacy assurances that many initially believed it would. The rise of sophisticated blockchain analysis tools have made it extremely difficult to maintain anonymity while transacting on the protocol. Privacy blockchains are one of the few alternatives which still allow netizens to protect their privacy.
About PowerKee
PowerKee is a cryptocurrency network that makes privacy easy. Users can transact cheaply and instantly while maintaining anonymity. The PowerKee protocol uses a mixture of zero-knowledge proofs and coin mixing to provide strong privacy assurances to its users.