Wednesday, September 8, 2021

Traceability of Cryptocurrency - Common Misconceptions People Have

Cryptocurrency

Cryptocurrency is the hot topic of discussion from recent few years, and it is gaining the attention of the whole world gradually. As with other things, the world spreads misconception about cryptocurrency too. There are numerous misunderstandings regarding cryptocurrencies and the system in which most of them are running, the blockchain. One of the major misconceptions is about the traceability of cryptocurrency. There are many myths revolving in the mind of common people about traceability of cryptocurrency. People usually intermix the anonymity and traceability of the cryptocurrency. There are many common misconceptions they have.

In this article you will get all the answers about these misconceptions, and we will focus mainly on the traceability of the cryptocurrency. First of all, let us discuss the basic terms which are needed to be understood first.

Cryptocurrency

Like other currencies, it is also a currency, whose purpose is to provide means of exchange. Director of an assignment writing services company says, But the basic difference is, it is a digital currency, also called as virtual currency. You have a digital wallet in it, where you can save your money and spend it where you want. Wallet is operated by the confidential credentials. Cryptocurrencies are gaining more and more attention because they have many benefits over traditional banks. You do not have to carry money from one place to another. Cryptocurrencies cannot be spent twice. Moreover, for traditional banks, you need to provide them your personal data to open an account there, but in cryptocurrencies, it is not necessary.

No doubt, there are some drawbacks of cryptocurrencies. Honestly speaking that are in fact drawbacks. People just make ill use of them, for example, you can do as many transactions as you want. You can open as many accounts as you want. Criminals use this facility for money laundering, and it became the preferred method for black market. Bitcoin was the first and foremost cryptocurrency. After that, hundreds of cryptocurrencies took place in the market with their own characteristics and facilities.

Cryptocurrency 1

Accessibility

It is also a misconception that you cannot trace any false transaction or you have no access to any other account. They think that there is zero accountability for transactions. It is not true; you can have an access to any transaction took place from anyone present on the network. This facility is even not available in tradition trades. You can check any detail of the transaction, even if you are not a part of it. You can check time, date and amount of any person involved in that transaction. Above all, you do not need to show your identity for this purpose.

Traceability of Cryptocurrencies

For those people who intermix the anonymity and traceability of cryptocurrency, let us make it very clear that all the transactions in cryptocurrencies are completely traceable as explained above. On the other hand, your personal identity remains as it is. There is no need to share your personal data with anyone. You are completely anonymous to another person. None of the procedures involved in transactions demands your personal identity.

You are thinking that how is it possible? The answer is very simple. When you use cryptocurrency, the network provides you a crypto address. You use that address everywhere for your transactions. These addresses are independent of your personal data. You can hold more than one address also. Again, there is no need to link your crypto addresses together, so that someone can get a clue of your identity from that link. No matter how many transactions you made, just keep your personal information to yourself. Once you reveal your personal data in that network, your anonymity will provoke. This hint was given by Satoshi Nakamoto, the inventor of first cryptocurrency bitcoin.

How Can You Get Traced?

Wait a bit for that answer. Satoshi Nakamoto is pseudonymous personality. No one knows about his identity. Either he is a person or a group. He just published the paper suggesting a peer-to-peer electronic cash system and then vanished away. The algorithm Satoshi presented has changed the shape of the cash system of the world and in few years, it will be dominant even more.

People became fond of this algorithm because it provides you a complete transparency under the watch of every person present on system. Even you can know the balance of a crypto address whenever you want. Because of its ease and transparency, people made a lot of transactions from the same address, and in block chain system, all data remains save forever. Now if someone is noticing your account very keenly, he can find a clue of your identity from your social media activities or from the personal link you provide with your crypto address. Remember, by default, blockchain system does not demand your identity, but if reveled once, it cannot be hided again from the world.

Users of cryptocurrencies should be well aware of “know your customers” and “anti-money laundering” polices. They have explained many ways to reveal the identities of criminals. On contrary, criminals can use those polices to provoke your identities. Revealing identity will make you insecure, and if you are a millionaire, you will be highlighted in the eyes of robbers sitting on network. So, always stay alert, and never provide any of your personal links.

Cryptocurrency 2

Benefits Of Traceability Of Cryptocurrency

So far you got to know that traceability of transaction is a good thing and revealing identity is a dangerous aspect, and both are independent of each other. There are many other benefits of traceability of cryptocurrency.

Blockchain is saving each and everything of the transactions taking place on it. The cheap dissertation writing services company has its own view about that this is a huge and precious data that can be used in various fields. Defense authorities can make their strategies according to that data. Markets can analyze the trends, the demands and supplies of the people. Interest of the people using crypto currencies is according to the increase in use of a specific cryptocurrency. Traceability increases the trust of the people, and provide them freedom and authority to claim transparency.

Conclusion

There are numerous myths about cryptocurrencies. We focused on some which were about traceability of cryptocurrency. We concluded that original identities are not traceable. Only the details of transactions are traceable, which is good.

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