Can Someone Track My Bitcoin Address?

Monday August 22, 2022

Can Someone Track My Bitcoin Address?
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Users would transfer payments to each other using Internet Protocol (IP) addresses in the early days of Bitcoin. Each internet-connected device has its IP address. Eventually, Bitcoin address creation phased out the IP address method.

A Bitcoin address is not traceable because no identifying information is contained directly on the blockchain. However, an individual's identity can connect to specific wallets they own and exchanges they have made. Although crypto wallets and transactions do not link to a person's identity, another entity can trace them back to the person who made them. For a safer trading experience, you can use a reliable trading platform like Quantum Ai which is the most trusted platform in Australia.

Defining a Bitcoin Address

A Bitcoin address can be written as a string of 26-35 letters and numbers or as a QR code. People should use Bitcoin addresses only once for single blockchain transactions.

Users must submit an address from their bitcoin wallet to receive coins. A Bitcoin address is technically called a "public key." Wallets include a collection of public keys obtained from the private key, which is the key used to unlock the wallet and gain access to its funds. Why are Bitcoin addresses used?

People use addresses to send and receive Bitcoin more securely. Bitcoin addresses help record the history of transactions made on the blockchain. All transactions made on the Bitcoin blockchain have been documented, including the following data:

  • The sending address

  • The receiving address

  • The transaction time

  • The amount of bitcoin sent

  • The number of network verifications

    Addresses allow this information to be recorded anonymously in what appears to be a jumble of random characters and bitcoin amounts.

    How a Bitcoin Address Works

    A Bitcoin address is required when sending or receiving bitcoin. With the click of a button, most wallets will generate a Bitcoin address. When we speak of Bitcoin addresses, we are referring to public keys. One-half of an asymmetric cryptographic key pair is public keys. The private key is the other half. Wallet users use the private key to sign transactions and the public key to receive transactions.

    Because wallet software uses cryptographic operations to generate a public key from a private key, it is secure to share any public key. However, sharing a private key can lead to theft because anyone who has the private key can obtain the funds in that wallet.

    A wallet can generate a large number of public keys. Receiving coins to the same public key makes it easier for outside observers to link a wallet to a user's identity.

    The Difficulties of Tracing a Bitcoin Address

    Although Bitcoin is only relatively anonymous, there are methods for users to achieve near-complete anonymity on the network. Here are a few of the common approaches to achieving this goal.

  • Coin mixing, which entails combining multiple transactions, making it more difficult to associate a single user with any transaction.

  • Creating a large number of wallets and using them as intermediaries for conducting transactions may eventually eliminate the source identity of the initial transactions.

  • Running a full node requires some technical knowledge, but it is comparatively cheap, and almost anyone can do it. Because an outside observer will have trouble differentiating between the many transactions running through the node, routing Bitcoin transactions through a personal node increases anonymity. The node would process not only that user's transactions but also the transactions of thousands of other users.

    Combining two or more methods may make tracing Bitcoin transactions difficult. However, doing so requires significant time, effort, and additional technical knowledge.

    The Take-Away

    Transferring Bitcoin between people requires Bitcoin addresses, and the process is similar for the majority of cryptocurrency types as well. However, this refers to the public keys, and you should not expose your private keys even when trading on trusted apps.

    Many people believe that privacy in crypto is not as universal as enthusiasts say and that somebody can trace most transactions. However, there are methods for making transactions less traceable.