Before Purchasing Bitcoin
For Bitcoin investors, privacy and security are critical concerns. Anyone who obtains the private key to a Bitcoin public address has the ability to authorise transactions.
1 Private keys should be kept private; if criminals learn about big holdings, they may try to steal them. Keep in mind that the balance of a public address system can be seen by anyone. On the other hand, an individual can create many public addresses for themselves using this public information. As a result, users can disperse their Bitcoin holdings among multiple addresses. Keeping substantial investments at public addresses that are not directly connected to those used in transactions is a wise practise.
Anyone, including you, has access to the blockchain's transaction history. Although transactions are stored openly on the blockchain, personal information about users is not. Only a user's public key displays next to a transaction on the Bitcoin blockchain, making transactions confidential but not anonymous. In this respect, Bitcoin transactions are more transparent and traceable than cash transactions since, unlike private cash transactions, they are all visible to the public. However, Bitcoin transactions are designed with an element of anonymity in mind. On the blockchain of the cryptocurrency, tracing the transacting parties, i.e. the sender and recipient of bitcoin, is extremely difficult.
According to international experts and the FBI, transactions on the Bitcoin blockchain can be tracked to users' other online accounts, including their digital wallets.
2 When someone opens a Coinbase account, for example, they must present identification.
3 When that person buys bitcoin, it is now associated with their name. It can still be traced back to the Coinbase purchase that is linked to the account holder's identification if they transmit it to another wallet. Most investors should be unconcerned about this because Bitcoin is legal in the United States and most other industrialised countries.