If your bitcoins are tracked, “there is no freedom and sovereignty”: 5 privacy tips

Bitcoin privacy course.

Last Sunday, June 5, a Bitcoin privacy course was given entirely in Spanish, where students acquired tools to prevent their transactions from being tracked until they reached their real identity.

The Bitcoin privacy course is led by Arkad and Peter Hold (PHold), well-known members of the bitcoiner community, who use these pseudonyms to navigate the ecosystem.

Both conducted this workshop where it was explained how to use advanced wallets to manage bitcoins, so they are not tracked. They also explained the ways people break the privacy of their transactions and what methods an attacker or surveillance company might use to track the Bitcoin blockchain.

«The course is theoretical and practical (more practical than theoretical), theoretical to understand the problem (privacy limitations) and practical to learn how to use the tools in testnet mode [red de pruebas]and with that mitigate the effects of the problem”, PHold assured CriptoNoticias.

Some of the advice given in the course, and explained in detail, can serve any Bitcoin user to strengthen their privacy.

Bitcoin privacy course.
The Bitcoin privacy course seeks to provide tools to protect yourself from financial espionage. Source: Arkad and PHold Privacy Course.

Buy and sell Bitcoin on exchanges that do not require your data

The main factor that violates the privacy of users is buying or selling bitcoins on exchanges or markets that collect user data.

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If your bitcoins are tracked, "there is no freedom and sovereignty": 5 privacy tips

During the course, Arkad pointed out that these types of exchanges require you to share with them a personal photo, your passport or identification data, home address, in addition to the location. This is what is known as politics. know your customer (KYC) or know your client.

Later, once you withdraw your BTC, they can track them through transaction log analysis and apply sanctions if for any reason they consider that you are engaging in illicit practices.

Manage and separate your KYC from non-KYC coins

It is for this last reason that there is a need to separate KYC coins from those that are “clean” or free from any association with your data.

Bitcoin wallet and transaction logic does not work with a unified balance, but with User Transaction Outputs (UTXO) or departureswhere each of these outputs can be seen as individual tickets and with an assigned value inside a purse.

At the time of making a transaction, the wallet gathers these coins until adding the value to be transferred, and delivers them to the recipient address. If the value of the UTXO exceeds the value of the transfer, a UTXO or change output is generated, that is, the remaining change received by the person who is sending the transaction.

If a UTXO whose data is associated with an exchange is mixed with another “clean” or unrelated UTXO, basically they would be contaminating and someone could know what your other BTC are and where they are transferred.

Use wallets and advanced tools to control your BTC

Arkad and PHold’s privacy course was given last Sunday, but during this week, their students are practicing with the testnet or testnet of Bitcoin.

One of the key points to practice is the use of wallets that have advanced functions to benefit the privacy of Bitcoin. In relation to the UTXOs, a technique known as “Coin Control” must be applied, which is basically to label or classify the UTXOs that have KYC, separating them from the non-KYC ones, in addition to blocking their spending so that when making a transaction, the wallet does not mix them.

Bitcoin network transaction example.
Bitcoin testnet transaction example on the Sparrow wallet. Source: CriptoNoticias.

This feature is available on wallets like Samourai, Sparrow, Wasabi, Electrum, Specter, Simple Bitcoin Wallet (SBW) and Blue Wallet and is vital for managing your UTXO.

Implement privacy practices online and in real life

Many bitcoiners go so far as to take exceptional measures in their private lives to protect themselves. For example, not revealing that they know anything about Bitcoin. Also if you happen to go to a conference or public meeting, or appear in a video or photograph, hide your face completely.

But at the level of maintaining privacy in Bitcoin there are several habits, such as using a VPN when browsing the Internet, or using the onion protocol (Tor) for the same purpose.

This acquires special relevance when consulting our transactions in a block explorer. During the course it was recommended to access the Mempool.Space or Blockstream explorers through Tor, so that the host does not know what transactions you are consulting and where you are doing it from.

Mix your coins with CoinJoin and use PayNym

The process known as CoinJoin allows multiple users to mix their coins across multiple transactions to avoid tracking.

This method has become very popular in recent years and represents one of the most advanced privacy practices in Bitcoin, although it would not be able to eliminate the fact that an exchange has your data. A CoinJoin can be done with the Sparrow, Wasabi and Samourai wallets.

On the other hand, there is PayNym, which is a protocol that allows Bitcoin users transact without exposing addresses on-chain of their wallets, but through a pseudonym or simple avatar. The students of the course are also practicing with this protocol, which represents an elevated way to exchange bitcoins without exposing yourself.

Why is it important to have privacy in Bitcoin?

Most Bitcoin content and education is available in English, not Spanish, so this privacy course from Arkad and PHold represents a great step to teach the best techniques to the Spanish-speaking audience.

On the other hand, contrary to what some critics of Bitcoin believe, this protocol is not really private, but it is entirely transparent and transactions are easily traceable.

But why is it necessary to learn about Bitcoin privacy through a course? «The idea is that users are aware of the privacy limitations that Bitcoin has and how easy it is to track someone’s economic activity, “says PHold exclusively for CriptoNoticias.

Each member who participates in our course acquires the knowledge to choose the most reliable tools we have today (Samourai wallet and Sparrow wallet) with their own criteria. You can’t wait for the Bitcoin protocol to change for privacy improvements.

If the methods used for surveillance are known, strategies can be used to break those methods. That’s why we focus on the heuristics that spies (which can be surveillance companies working with exchanges, a casual blockchain observer, or someone we pay in bitcoin or receive bitcoin from) use to track down transactions. others’ finances.

There can be no freedom and sovereignty or true individual security if you can know how much you earn, how much you spend and how much savings you have, in the Bitcoin blockchain there is no bank secrecy law as there is in the fiat world.

PHold, Bitcoin privacy specialist.

Arkad and PHold.
Arkad and PHold are well-known Bitcoin privacy specialists in the community.

On the other hand, the specialist assures that the more people use the privacy tools, the greater the joint anonymity of all Bitcoin users.

“If there are not a good number of users using these tools, the anonymity set of those who do use them will not be as high,” he says.

That is why it is a good idea to create content of this type and in Spanish so that everyone can help improve the anonymity set of Bitcoin in general, those of us who want Bitcoin to prosper must be taking care of these things. This is not about creating a “do these steps and the problems are solved” recipe, we are dedicated to delivering enough knowledge so that users are critical and can choose what is best for them. Considering your threat models and some real life scenarios.

PHold, Bitcoin Privacy Specialist

through the Arkad Telegram channel You can find out what the next editions of the Bitcoin privacy course will be, which is always being optimized and improved by adapting to new tools.

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