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10 Exposed and Hidden Personal Info When Trading in Bitcoin

Updated on by in Make Money Online

Bitcoin is indubitably the world’s largest crypto-currency as well as the most preferred one. Unfortunately, in recent years and most lately, in May 2017, Bitcoin gained notoriety for its use in crime during the WannaCry ransom ware attack on computers worldwide.


Furthermore, there is also some reluctance on part of governments worldwide to recognize Bitcoin as legal tender.

Bitcoin Speculation

Bitcoin prices are soaring and currently stand at over US$10,000. A few months ago, it was available for a little over US$ 1,000. Prices rose to over US$ 2,000 earlier this year and are expected to touch an all-time high in coming months.


Obviously, this would tempt any speculator to invest heavily in Bitcoin. Returns on investment on Bitcoin have proven to be very high and unlike trading on conventional currency markets. The surge in Bitcoin prices is most likely caused by large speculators entering the market to stock up this crypto-currency.

Level of Privacy

Understandably, a crypto currency of such high value comes with some pros and cons. On one hand, Bitcoin is preferred because it offers buyers and sellers a very high level of anonymity. However, with its rising notoriety in crime, law enforcers have indeed found ways and means to identify who holds Bitcoin. Is it possible to conceal all your personal information while trading in Bitcoin? The answer is NO.

Personal Information that is Exposed


1. IP Address

Obviously, you cannot access your online Bitcoin wallet from some cybercafé without high risks. Hence, you will access them from your home, office or mobile. Remember, each time to access the Internet, you are assigned an unique Internet Protocol (IP) address.

Internet Service Providers (ISPs) can track your IP address easily. Worse, they can access records of websites you access and transactions you perform. Hence, you can be tracked while trading in Bitcoin.

2. Buying and Selling Bitcoin

Bitcoin is a crypto-currency. It owes its existence to the Internet. Indeed, Bitcoin lives on the Internet and can only be bought or sold online. Hence, you will require a credit/ debit card or net banking facility while buying Bitcoin.


Considering the high value of Bitcoin prevailing nowadays, your credit/debit card or net banking transaction will be recorded by your bank or the credit/debit card issuer. This information can be easily accessed by law enforcement agencies, usually with an order from any appropriate court.

3. Bitcoin Exchanges

Bitcoin exchanges are online or physical places where you can buy or sell the crypto-currency. Trading at a Bitcoin exchange means, you may have to divulge some personal details such as your bank account number.


In some countries, you may be asked to provide your identity and address proof, due to the high value transactions. This exposes your info while trading in Bitcoin.

Cash transactions with Bitcoin- either selling or buying- are recorded.

4. Hardware Bitcoin Wallets


A large number of Bitcoin buyers prefer keeping their crypto-currency in hardware wallets. These hardware Bitcoin wallets have some inherent benefits: The chances of anyone hacking them are much lesser.

Further, these hardware wallets can be connected to the Internet to trade in Bitcoin. However, you have to buy these hardware Bitcoin wallets from some vendors or e-retailers including Amazon. They cost as low as US$ 100 each by paying cash or using your credit/debit card or net banking.

Once again, your transaction for buying a hardware Bitcoin wallet will reflect in your bank statement or the e-retailer’s records.

5. Interpol and Law Enforcers


As we mention earlier, Bitcoin is now increasingly viewed as a currency that can be used by criminals for cybercrime, drug trafficking, human trafficking, terror funding and tax evasion.

Hence, law enforcers around the world including Interpol, Europol, Federal Bureau of Investigation and their counterparts are finding ways and means to track Bitcoin users. The history of Bitcoin shows several cases where criminals have been hunted down and brought to justice through cooperation between various law enforcement agencies worldwide.

This means, your information as Bitcoin trader is exposed.

6. Proxy Trading

Of course, you can trade in Bitcoin through a third party. However, very high risks are involved in such transactions. Firstly, you will need to pay a considerable amount to the proxy who buys and sells Bitcoin on your behalf.

Secondly, the person or organization can breach your trust and flee with your Bitcoin. In such an event, you will be unable to initiate criminal or legal action against your proxy easily. You may have to undergo a lengthy process before filing any charges.

Notwithstanding the exposed information, here are details about what remains concealed.

Personal Information that is Hidden


1. Source of Funds

Bitcoin, unlike fiat or conventional currencies, can be easily bought on the Internet through any reputed Bitcoin exchange. Generally, these exchanges will never ask you to prove your source of funds that you use for buying Bitcoin.

Hence, the high interest among speculators. The money could come from legitimate sources such as your salary, investment or business.

Alternatively, it can also be funded with money gained from illegal activities.

2. Taxation

Generally, tax authorities in your country will have no means to determine whether you hold Bitcoin, unless they do a thorough search of your financial transactions. Hence, your investment in Bitcoin will generally be exempted from tax.

There are some moves by various governments to try and bring Bitcoin investments under the ambit of taxation. However, these remain at embryonic stage only.

3. Your Identity and Location


One of the biggest advantages of Bitcoin is your identity as a buyer or seller remains secret. You enjoy almost total anonymity while trading in Bitcoin, unless you come under scanner of law enforcement agencies for any illegal activities.

Records of your location are also not maintained. You can buy Bitcoin in any country outside your native land. Generally, Bitcoin exchanges maintain a high level of privacy, which makes investment in the crypto currency more attractive for large investors.

This is the main reason that entices cybercriminals, drug traders, tax evaders and terrorists to patronize Bitcoin.

4. Profits through Speculation

Some people have made large investments in Bitcoin only for speculation. This is due to the unprecedented high returns the crypto currency now offers on investment. In the prevailing financial scenario, you will most likely earn a hefty profit by speculating on Bitcoin.

Unlike earnings from conventional currency markets and other businesses, your profits by trading in Bitcoin remain your secret.

5. SpendingAn increasing number of establishments such as online casinos accept Bitcoin. A few e-retailers also accept Bitcoin for merchandise. Your spending in Bitcoin remains anonymous unless you choose to receive payments in cash or goods delivered to your office or home.

Once again, such spending can escape attention only if you are not involved in any criminal activity that comes to the notice of law enforcement authorities.

Final Word

Understandably, with very high returns on investments, the popularity of Bitcoin among big-time currency speculators will surge. Simultaneously, we may also witness a growing number of cybercrimes and other unlawful activity involving the Bitcoin. Lingering fears over the use of Bitcoin by criminals and terrorists has already drawn attention of law enforcers worldwide, as we mention before.

Hence, trading in Bitcoin will most likely not remain anonymous in coming years. Should your funds come from legit sources, you need not fear trading in Bitcoin.

Author: Pritam Nagrale

Pritam Nagrale is a blogger and running a digital marketing company in Mumbai. His blog MoneyConnexion writes about make money ideas & tips on saving money.

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