Can some one explain how Bitcoin provides anonymity?
The transactions are tracked using something called block chain. There are ledgers kept somehow within Bitcoin systems.
So how exactly is it anonymous? Aren’t Bitcoin transactions analagous to credit or debit card transactions, in that they are tracked within financial accounts?
Only the IP is logged which can be easily faked.
As opposed to any bank transactions which now require multiple IDs and verification in most nations.
Also, in the USA any cash transaction exceeding $10k must be reported. As well when moving more than $10k in currency across the border.
You can buy bitcoin. That requires money. Maybe yourself in person or a bank account number. But after that you are not tracked. You can go on line and trade it. Which is the same as laundering the bitcoin. The best thing is that you can move it between countries. You can payoff that guy who kidnapped your daughter. You can buyoff the hacker who locked your computer. You can run from China with your money and buy Aussy dollars instead. Or just leave your thumb drive in a safety deposit box or under a mattress. Wallets don’t need to have your name.
But you can easily lose your bitcoin as well. And some think as many as 4 million of the potential 21 million bitcoin are gone, erased or otherwise lost. So the value seems to be going up. And its the possibility for your coins to be erased or hacked or otherwise stolen that makes me not like them.
Bitcoin is the preferred method of payment among criminals. And that is why governments don’t like it. But it can also take down the US dollar and other currencies as well. And that scares governments.
If you look at the last great recession you saw it was fixed by dramatically printing money. We all used to think that this would cause hyper inflation. But it didn’t. The reason is that all the major currencies did the same thing. They all printed money. So there was just more money in the world. The exchange rates stayed relatively the same because the currencies all grew. But bitcoin can’t really grow. So the theory goes, it will grow in value as the fed prints more money or congress goes further in debt. It could be the thing that makes all money grounded to a value.
Gold was supposed to be that thing. But the US, world fund, and Germany have so much that they can sell it. and lower the price. And now we know they can also short the GLD ETF too. So if Bitcoin gets about 1000 times larger. Then it could be the standard currency. But it could also go down in flames by a really good hack. Or it could be criminalized in major countries too. Either way it would lose most of its value.
It’s anonymous unless someone identifies your address. When they have that, everything is open. Every transaction, in or out.