Cryptocurrency Explained: How to Get More Privacy on Bitcoin Transactions [Privacy is a Human Right]

[Question] What are some of the steps 
one should take to maintain anonymity   while using bitcoin — from simple to advanced? 
Well Vegeta, anonymity or privacy is not a one   bullet solution. There's no silver bullet 
for this. You have to layer your defenses,   like any aspect of information security, 
and privacy is a fundamental component of   information security. You have to use 
layered defenses, which means you do   several things and you hope that at least 
some of those things work. And in conjunction   they give you a degree of privacy now 
and in the short and medium term future.

There are a number of things you can do. The 
first one has a lot to do with how you source your   bitcoin in the first place. So in terms of least 
private to most private, least private is probably   buying bitcoin from an exchange because 
they require KYC and ID and all kinds of   other things. That not only erodes your privacy, 
because that bitcoin is going to be tracked and   associated with that identity, but it also exposes 
you to identity theft because in many cases you're   dealing with small startups that cannot do 
information security. And it's impossible to   do that perfectly, so someone can steal those 
identifiers. The second best is to buy bitcoin   from some kind of bitcoin ATM.

But of course 
bitcoin ATMs also sometimes require ID. Or   they require a smartphone a cell phone number to 
verify you. Or they're in places where there are   closed circuit tv cameras all around 
you, or other people who may see who you   are. And you don't really want to go into a mall, 
where there's a bitcoin ATM with a low low hat   over your head and a hoodie over you 
and kind of look around suspiciously,   then you're the cartoon villain. The next one 
would be to acquire bitcoin in a person-to-person   transaction by exchanging cash for bitcoin in a 
public setting with someone who has bitcoin. And   of course you know that's going to have its own 
risks and potential for exposure. Then it would be   to earn bitcoin by providing your labor services, 
products, or whatever, from a third party and   that's a very clean way because you can do that 
without an in-person interaction. And, you know,   theoretically at least, only the person who's 
paying you knows who you are, if that. They might   not. Once you've sourced your bitcoin, of course, 
how you use it really makes a huge difference.   If you reuse bitcoin addresses, you violate your 
own privacy.

So a very important rule of thumb, in   any cryptocurrency really, is avoid 
as much as possible address reuse.   And of course you know there's only so 
much you can do as a user. Because a lot   of that depends on how your wallet constructs 
transactions, how it constructs the change   in those transactions, how it sequences outputs, 
what fingerprints it leaves, et cetera, et cetera.   The third one is network opsec, overall 
operational security on your network connections.   If you're in a public hotspot, in a cafe, using 
unencrypted network connectivity to a non-ssl   tls encrypted website, where you're plugging 
in your name and address to have bitcoin socks   delivered to your home. And then you're sending 
that transaction from your one address — well   I mean you're working against yourself.

And then 
finally there's all kinds of other things you   can do that involve various forms of privacy 
improving tools, known as mixers or coin join,   coin swap, and things like that. Including trading 
cryptocurrencies of one kind for another kind   in decentralized markets. Now those may or may 
not be legal depending on your jurisdiction.   In some jurisdictions they're legal, in other 
jurisdictions they're not. It may also depend on   what you're doing with that crypto. Of course, if 
you're doing something illegal then the process of   trying to hide that is in itself illegal in almost 
every jurisdiction that i can think of — and I'm   not going to give you legal advice. These are 
really steps. And you can think of privacy very   similarly to the construct we've used in the past 
to discuss financial independence and sovereignty,   we say, you know. Not your keys, not your coins 
is one of the steps. But you can start from   buying some crypto, that's some degree of 
financial independence. Then moving that   away from an exchange, that's another degree of 
independence. Then using a hardware wallet, that's   another degree of independence.

And we talk about 
that as the staircase of sovereignty — a term   invented by Stephanie Murphy. I really love that 
visual of climbing up the staircase to achieve   greater and greater financial sovereignty. 
Well the same thing applies to privacy,   right? You can start at the bottom step 
and the very fact that you're not using   venmo or some other crap like that — that's 
broadcasting your financial transactions to the   entire world and every intelligence agency that's 
listening — is already one step. I mean, even if   you use bitcoin badly, you're already doing better 
than venmo or many of the other things.

So opting   out is step one. Opting out of the system of 
surveillance, traditional finances step one.   And then you can start climbing up the ladder. 
Every step is worthwhile. There is no step at   which you're not a true bitcoiner, you don't take 
privacy seriously, we're going to [judge you]. No!   Applause! You managed to take one step.

Good for 
you, you're already doing something different from   the majority of people out there who don't 
care enough about their financial privacy.   And if you make it three or four steps staircase, 
you're really making a difference in the world! So   keep it up. Hi. Thanks for watching the video. I'm 
Andreas Antonopoulos. I'm the author of Mastering   Bitcoin, Mastering Ethereum, and The Internet 
of Money series. If you'd like to support my   mission of bringing education, about bitcoin and 
open blockchains, to as many people as possible   under open free creative commons licenses, please 
consider subscribing to my channel and supporting   me on patreon.com/aantonop
Thank you!.

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