Disclaimer: This book is exclusively for educational purposes. Any financial decisions made by you, are at your own risk.
To enhance privacy while using Bitcoin, various techniques and tools can be employed. While these measures don’t provide absolute anonymity, they offer increased privacy and make it more challenging to link transactions to specific individuals. Some notable techniques include:
- Using New Addresses: To reduce address reuse and link ability, it is recommended to generate a new Bitcoin address for each transaction. This practice makes it more difficult to trace and associate transactions with a single user.
- Coin Mixing or Coin Join: Coin mixing involves combining multiple transactions from different users, making it challenging to trace the flow of individual coins. Coin Join is a specific implementation of coin mixing that allows users to combine their transactions, obscuring the connection between inputs and outputs.
- Privacy-Focused Wallets: Certain Bitcoin wallets prioritize user privacy by implementing features such as coin control, deterministic wallets, and integration with privacy-enhancing technologies like the Tor network. Examples of privacy-focused wallets include Wasabi Wallet, Samourai Wallet, and Electrum Personal Server.
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The Paperclip Maximizer and the dangers of blockchain economy : Layer-2 solutions, such as the Lightning Network, enable off-chain transactions that are not recorded on the blockchain. These transactions can offer increased privacy as they occur outside the public ledger, minimizing the potential for link ability.
