Privacy of bitcoin

Is Bitcoin not a privacy coin?

The notion that Bitcoin is completely anonymous is a widespread one. It is also incorrect even though transactions involving Bitcoin do not involve the transmission of personal information. It is possible for Bitcoin owners to protect their identity to a certain extent, but not completely.

An individual can spend Bitcoin without using their name but their transactions can be connected to the addresses whereby they receive Bitcoins. If those addresses are ever tied to their personal identity, all the transactions associated with them will be tied to their identity as well as the Blockchain keeps a permanent record of every transaction carried out. It is widely recommended that Bitcoin owners use a new address for each transaction. While this method does help with anonymity, it is flawed.

It's true that you can transact with bitcoin without having to provide your Social Security number or bank account, there's still data on the digital ledger that could potentially be linked back to you.

The Internal Revenue Service recently won a court case against cryptocurrency exchange Coinbase requiring it to hand over information on more than 14,300 users who'd exchanged more than $20,000 worth of bitcoin between 2013 and 2015. While the move was made so the IRS could possibly go after capital-gain tax evaders, the bigger theme here is that these transactions aren't as anonymous as they appear.

I am not going to shill my coins, but privacy coins are a simple evolution of what bitcoin helped create. They're designed to ensure that a user who doesn't want their financial information going public won't have that to happen. You might even call them the pinnacle of what decentralized cryptocurrencies are all about.