It’s 2018, people value their privacy. And the public is very sensitive to online privacy and anonymity. Nobody wants third parties sniffing around one’s personal information, especially when there is money involved. Hence, there has been an establishment of many anonymous Bitcoin wallets to safeguard your identity and your funds.
This article will talk about bitcoin wallets that will keep your identity private/anonymous. It will then try to compare a few of the best anonymous BTC wallets and show you how it works.
But before that, let’s cover some basics that you should know about if you have just arrived at this cryptocurrency party.
- 1 What is a Wallet in cryptocurrency?
- 2 What are public and private keys?
- 3 What are Anonymous Bitcoin Wallets?
- 3.1 What is the risk of using Normal Wallets?
- 3.2 Wait. But isn’t Bitcoin anonymous?
- 3.3 So how do I ensure my wallet safety from hackers?
- 4 3 Best Anonymous bitcoin wallets you can rely on
What is a Wallet in cryptocurrency?
A cryptocurrency wallet is a digital wallet that enables you to store, receive and send digital cryptocurrency funds such as Bitcoin. The wallet interacts with the currency’s blockchain to facilitate direct transactions between two individuals without any intermediaries.
Your wallet is the single most important thing as it holds all your funds.
There are different types of wallets that you can choose from, but for the simplicity of the article, we will not dig into such depths.
Now, you can do four things when you own a wallet.
1. You can store your funds
2. You can send funds to others using your private key
3. You can receive funds using your public key
4. You can check your balance on the go.
What are public and private keys?
If you have owned a wallet, then you already know what these keys are.
As mentioned earlier, your wallet’s public key is the key which you give others to receive funds. This key will be displayed as a series of random letters or in the form of a QR code.
On the other hand, your private key is the code that you use to access your wallet and your funds. Your private key is like the key to your bank locker, without it, you will never be able to touch your funds.
Hence, it is very important that you don’t lose your private key. If you lose it, or somebody gains access to it, you will lose your account and all your funds.
What are Anonymous Bitcoin Wallets?
As the name suggests, anonymous bitcoin wallets are wallets that provide anonymity to the clients. Such wallets specialize in keeping your personal information and your transaction details safe from third party inspectors.
They mainly do this by methods such as using VPN or the tor network to carry transfers and keep changing the public keys of your wallet. They may use encryption and do not ask for your personal information like your email id while creating a wallet.
Tor or ‘the onion router’ is originally a software which gives anonymity to the browser. It achieves this by changing your VPN and encrypting your IP address by routing your network through several remote servers.
What is the risk of using Normal Wallets?
People just don’t seek Anonymity in their wallets to buy illegal drugs from the dark web, most prefer anonymous bitcoin wallets (and you should too) because it ensures that your personal details are safe from third parties with malicious intentions.
For example, there are possibilities where a hacker can access your account or gain information about your funds through your online wallet without any anonymity. The hacker might use such information to track your funds down, track the accounts you send funds to or even track you down.
Although public keys are secure to display. Hackers might use that information to trace your transactions and your wallet. Now let’s say that you had given some personal information like your email or phone number, the hacker then can gain access to them and discover sensitive information that may compromise you or your account.
Scary, I know. But the truth is, there has been a lot of incidents like this.
Wait. But isn’t Bitcoin anonymous?
No Bitcoin isn’t anonymous, it’s actually quite easily traceable.
Bitcoins rather uses a pseudo identity. You see, when you make a transaction using Bitcoin, your name and address might not be displayed on the ledger. But the block holds in itself the transaction details containing your public key which can be traced to your wallet. Now if you don’t have an anonymous wallet, hackers can get your information out of the wallet if they so desire.
So how do I ensure my wallet safety from hackers?
Here are a few small and important pointers that you can remember to safeguard your wallets and your funds:
1. Log in to secured sites.
This is the most basic precaution you need to take. Always log into secure websites with the ‘https://’ prefix.
Also check: Best Chrome Extensions to Keep You Secure
2. Be aware of Phishing Scams
Phishing scams are done by redirecting you to a look a like page of your wallet where it might ask you to enter your personal information or private keys which then the scammers can use. Remember to check the web address and see if it is accurate to the official address.
For example, the official web address of a wallet might be ‘examplewallet.com’ while the phishing site will have an address with a slight glitch like ‘example.wallet.com’ or ‘examplewallit.com’
3. Use Updated versions of your wallet
When using any sort of wallet, make sure to keep updating the application. This is because older versions might be vulnerable to new threats. Hence it is important for safety. Plus updates might give you better performance and new features which you otherwise might miss out on.
4. Use VPN when making transactions or logging in
To be on the safe side, use virtual private networks whenever possible. Using VPN makes your IP address very hard to trace making YOU very hard to trace.
5. Enable two-factor authentication
Two-factor authentication is a security system feature in most wallets that lets you set an extra password every time you use your private key.
This ensures better safety. Remember to give a complex password that you can remember so that it’s not easily hack-able.
3 Best Anonymous bitcoin wallets you can rely on
Now that you know what anonymous wallets are and how it is so useful in this day and age, let’s discuss some of the best anonymous wallets you can use.
1. Electrum Wallet
The first wallet on our list is one of the oldest wallets out there. Electrum was developed in 2011 by German computer science expert Thomas Vogtlin. The Electrum wallet is a desktop wallet. This means it can only be accessed through your personal computer. Electrum also only supports Bitcoins. This means that you can only store Bitcoins in this wallet and other altcoins are not supported.
Electrum wallet has the benefit that it supports cold storage wallets like Trazor and Ledger nano s.
Cold storage wallets are less liquid wallets that are used to store your savings funds. Its harder for you to make transactions through cold storage wallets but they provide higher security as they mostly are offline wallets. Use cold storage wallets when you are keeping your funds unused for a long period of time.
You need to download the application on your computer, and the application will guide you through the steps of creating an account. The wallet will also generate a one time seed. This can be used to restore your wallet in case you lose your device.
Perks of Electrum
- Supports hardware wallets.
- Has a good reputation for security and anonymity.
- Generates seed that can be used to restore your wallet.
- Has two-factor authentication feature.
- feature.e on multiple platforms, but the most secure is the PC version
Cons of Electrum
- Despite being very secure, beginners might find it a little hard to operate on this wallet.
2. Jaxx wallet
Jaxx is one of the overall best wallets out there.
It was created in 2014 by Decentral inc., a company based in Canada.
Jaxx supports multiple variants of cryptocurrency. That is, you can store Bitcoins along with other types of coins in jaxx too.
Jaxx also never asks for any sort if personal information while you create your account. All you need to do is give a 12 word passphrase which ensures your two-factor authentication and wallet recovery.
Jaxx also creates a new public address every time you involve yourself in a transaction. This ensures that your anonymity is maintained.
Perks of Jaxx
- Creates new public addresses with every transaction.
- Doesn’t require any personal information for setting it up.
- Available on all platforms: Windows, Linux, Mac Android, iPhones, etc.
- Allows pairing feature. This can be used to access the same wallet from various platforms.
- None of your funds are held by Jaxx. This means that the whole set-up is client sided. Ensures that website hacks cannot endanger your funds.
- Trustworthy reputation
Cons of Jaxx
- Doesn’t use a multi-signature feature for transactions
- Doesn’t allow direct withdrawal of funds into legal tender (or government approved money)
3. Samourai Wallet
Still in its alpha stage as of writing this article, Samourai wallet is only available for Android platforms. It was launched in 2015.
Samourai uses military grade encryption to ensure anonymity. It also supports tor and creates VPNs while making transactions.
It is also well known for creating new public addresses on every transaction and makes the metadata of such addresses very hard to track.
Further, Samourai also has additional security measures like how it requires you to enter a 5 digit pin every time you want to access it.
Perks of Samourai
- Military grade AES-256 encryption
- Dependability and good reputation
- Use of VPN and the Tor network
- Creating new public addresses with every transaction
- Easy to use features and interface
Cons of Samourai
- Available only for android
- Doesn’t allow direct withdrawal of funds into legal tender.
Opening a wallet for any of these three wallets is pretty simple and they guide you through a step by step fashion.
Just remember the precautionary pointers to safeguard yourself from hackers and scammers. Be cautious and aware of what you are clicking.
All the best out there, may you remain unknown to the world.