Reported by: Rufus Kamau

Why is privacy important in Bitcoin transactions? 

First, if you have a sizable balance in your wallet, you don’t want anyone finding out because it exposes you to a $5 wrench attack. A $5 wrench attack occurs when someone discovers you have a large stash of bitcoin and controls the keys to that stash. As a result, they physically assault or threaten you in exchange for your Bitcoin. You don’t want to be in a situation where it’s your life or your Bitcoin. As a result, it is in your best interest to keep your bitcoin private.

Second, it is widely known that corporations have been mining customer data and selling it among themselves for ad targeting and other purposes. Many people do not want third parties to know what they spend their money on, who they transact with, or where they spend it. When using banks, payment service providers, and e-commerce platforms, this is a difficult task because they are KYC’d and stand to benefit from this personal data.

So, how do you transact with Bitcoin privately?

Using Opendime is one of the simplest methods. Opendime enables you to load a predetermined amount of Bitcoin onto a physical flash drive that contains a private key. The recipient can pay another party by physically delivering the drive to them.

Another option is to use the Mercury wallet, which uses a statechain to send and receive bitcoin. The wallet supports a variety of bitcoin denominations, including 1000 Sats (Satoshis) and 10,000 Sats. So, when you deposit Bitcoin, you exchange it for a set of Sat denominations that you can send directly to other Mercury users. Nothing is recorded on the Bitcoin blockchain during the send transaction, which transfers signing rights to the recipient. This ensures the privacy of your transactions.

An oversimplified example would be writing an email draft message and then saving it. Then you send the login information to the recipient, who logs in and reads the draft.

Other strategies for achieving privacy when transacting in bitcoin include the Wasabi wallet, which employs coinjoin functionality, and Bitcoin Laundry, which employs a mixer protocol in which you input bitcoin, it is mixed with other people’s coins, and then outputs untraceable bitcoin of the same amount.

Read full report: https://www.forbes.com/sites/rufaskamau/2022/10/24/how-to-send–and-receive-bitcoin-privately/amp/