The data of the transactions are all stored in a blockchain right. So, will anyone trying to trace me find out my name, address etc if I buy cryptocurrencies? Sorry I am a complete noobie to this concept!
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Potentially related: bitcoin.stackexchange.com/q/103243/63872– chytrikCommented Jan 25, 2022 at 22:07
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1 Answer
Buying and selling of bitcoin is done using exchanges.
If it is a centralized exchange you will do KYC, use bank account to transfer money and deposit/withdraw bitcoin. Only bitcoin transactions are available on Bitcoin blockchain and everything else stays with the exchange. Most of the exchanges will share it with government when required.
If it is decentralized exchange like Bisq, there is no KYC, bank account or other payment methods are only shared with other peer involved in trade and you always hold keys for bitcoin funds. Even in this case only bitcoin transactions will be available on Bitcoin blockchain.
A bitcoin transaction has inputs, outputs, version, locktime, type, amount, fees, time etc. Name, address and other KYC details are not a part of Bitcoin transaction. It is possible to link real identity with some transactions if users do not follow best practices.
Some of the best practices:
- Do not use KYC exchanges
- Do not reuse addresses
- Do not share information about transactions on social media
- Use a full node with Tor or i2p
- Use coinjoin and payjoin when required