I know little about bitcoin except they are digital currency.

  1. I heard that bitcoin ownership or exchanges/trading is anonymous and untraceable by government. Is that true?

  2. If I buy a bitcoin and pay by credit card, the money goes through banking system right? That would make it traceable wouldn't it?

Thanks in advance.

Appended: Thank you for the all answers that are informative. The reason I asked is because I heard that the underworld and money launderers etc. use bitcoin to evade governments' scrutiny which is part of the reason for its price soar. Guess there is no truth in that since transactions are traceable.


3 Answers 3


Bitcoin transactions are anonymous but traceable. Many wallets and exchanges are now linked to your bank account and ask you to furnish personal details beforehand. Hence, If needed they can trace you easily.

You can avoid it by buying BTC in cash.


Well, You have linked too many things to each other.

It depends on the website that you are using to trade.

There's many ways to trace you:

  • providing your name or email address.
  • Your IP address.
  • Using same bitcoin address.

Almost all trading websites gets your IP address - Email etc..

Currency tranding and exchanging is traceable regardless the type of currency.

Using your credit card it's like your are buying your bitcoins from tax agency.

I suggest to buy bitcoin by cash and from a local store or by person if you do care about hiding your identity.

Bitcoin transactions is anonymous and almost hard to be traceable if you are using your own web wallet and using new bitcoin address for each transaction.


Bitcoin is not both anonymous and untraceable, it is just anonymous. Let me explain.

Creating a Bitcoin wallet does not require you to provide identification, email, phone, or any personal data. You should be able to create Bitcoin wallets offline.

All Bitcoin transactions are traceable; I can view all transactions made by a bitcoin address at any point in time available on the blockchain. Of course these bitcoin addresses will seem cryptic since there is no relationship with identification.

Anonymity must however be protected. If you tell everyone that your bitcoin address is 1XYZ (example), then with a quick search, someone can relate the address to your name thus removing anonymity.

Trading on exchanges can also reveal your identity to centralized organizations. Depending on the jurisdiction of these organizations, the government may find a connection between your banking details and your Bitcoin address.


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