Bitcoins have always manifested traits of anonymous nature despite of being the world’s most popular cryptocurrency. There has been a lot of talk about Bitcoin in the news recently, especially due to its high use in deep web and ransomware demands. Researchers worldwide are struggling to find a detailed interpretation about how this actually works. Thus there’s no wonder that Bitcoin has become a trending topic in current era. Various research specialists are trying to figure out how the future of Bitcoin will look like couple of years down the lane.
Before reaching to conclusion let’s have a precise understanding about what Bitcoin is and how does it work on a basic level.
What is Bitcoin different from other Conventional Currencies?
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros. Bitcoin are mined by individuals and businesses, who use a special ‘Mining rig’ to produce and record bitcoin transactions. The major characteristic which makes it unique from other currencies is that it is decentralized. No single institution controls the Bitcoin network making its price highly fluctuating as compared to physical currencies.
What makes Bitcoin anonymous?
Here are a few reasons why Bitcoin is regarded as anonymous:
- No record of Personal Credentials: Any individual can generate a completely new Bitcoin address without the need of filling-in any personal information.
- Identity Remains Concealed: Anyone can effectively transfer Bitcoin from any address to which it controls, to any other address, with no need to reveal any personal information at all.
- Node Structure: As Bitcointransaction data is transmitted and forwarded by nodes, it stays quiet ambiguous to state whether a particular node was created to execute a transaction or just to forward data.
Anonymous or Pseudo-anonymous?
There are several competing theories on this thought. How does one go about deciding? How would one let others know what they’ve decided? Well, the answer lies in the knowledge! Bitcoin is often described as an anonymous currency because it is possible to send and receive Bitcoins without giving any personally identifying information. So, average users should be aware that it is certainly less anonymous than cash.
But it isn’t completely anonymous. As Bitcoins work on block-chain structure, there is a record for each transaction ever made. If a Bitcoin transaction can be tied to a person, like through an online store, shipping address, etc. that money can be easily traced. Hence, using the term anonymous is quiet amiss.
The Future of Bitcoins!
So what about the future? Would you still rate Bitcoins as sophisticated? Or are you having shaky thoughts of “Security Concerns”. As Bitcoin adoption is on a rise, improved techniques will surely be devised in near future to make the transactions more secure and sound. For instance, graphical interface might be improved to increase user friendly payment requests. In addition to this, extended privacy features might be introduced to overcome security concerns. A few more improvements can be expected in the future so that users enjoy a certain level of privacy.
In this article, we attempted to outline why Bitcoin is not inherently anonymous. Don’t hesitate to share your views in the comments section below if you have a say.