Privacy Enhancing Tips for Bitcoin Users

As a noncustodial wallet platform, we’re big on privacy and empowering our users. That’s why we’re excited to welcome guest blogger and online freedom advocate, Faith MacAnas, this week. In her post, Faith covers the basics of 3 online privacy boosting tools with bitcoin users in mind. To find out what they are, dive in below!

One of the top draws about using bitcoin to shop online is being able to do so with an increased standard for privacy. We use the digital currency for many different reasons, but a key unified purpose is largely that the nature of our own personal transactions is really nobody’s business.

While transacting with bitcoin doesn’t reveal the same personal and purchase details a credit card purchase will, the movement of funds on the bitcoin network is publicly visible (with a block explorer). So is using bitcoin alone really enough? Spending it online can also leave us vulnerable to malicious groups who wish to track down users and their activity. Between entities like hackers and governments, how can we make sure we’re protecting ourselves online?

There are really three different alternatives:

  • Connect to a Proxy
  • Browse on Tor
  • Get a Virtual Private Network (VPN)

Each strategy comes with its own costs and limitations, though some more than others. Below, we take a look into the various strengths of each service and which, if any, is the most practical.

Proxy Servers

Proxies have been around for a very long time; besides being the butt of any number of internet jokes, they were really the Internet’s first answer to establishing a remote connection. Proxies, by definition, are just devices or hubs set up at a different location that users bounce their connection off of before the rest of the net.

They add a small layer of privacy—at least against less advanced parties. Very few proxy servers host meaningful security, acting as little more than a piece of a firewall to help prevent intrusions. In fact, many home based routers end up with better security than proxies just because those proxies tend to be free.

In the world of security and privacy, free isn’t necessarily a good thing. Not only does it tend to mean less security, it also means worse bandwidth. Not that proxies aren’t without some merit; they work well enough to assume a different IP address for basic functions, just not for preventing advanced tracking. As many proxies are free, they’re good for users on very tight budgets.

But for users on a tight budget, there may be a more secure option.

Tor Browser

Tor, short for The Onion Router, is a browser service that makes use of multiple relays around the world to mask your connection from monitoring. It might be best thought of as a series of proxy servers, with each connection making it harder to trace actions back to the original user’s address.

Like other proxy services, Tor is free, but is limited exclusively to the Tor Browser and supported apps on Android. It works in most cases, but has been shown unreliable in some cases as government entities such as the NSA are able to track your activities with the help of internet service providers. That’s because they can tell if you’re a Tor user.

That doesn’t mean Tor is totally useless; as a free service, it does a good enough job. Yet there is one last alternative that has the potential to do a much more complete job.

Virtual Private Networks (VPNs)

If you’re willing to stomach a small premium, VPNs are definitely the best way to go about enhancing your privacy during any given activity online. That stems from two major factors:

  • VPNs are encrypted and as a result, so are you.
  • All internet traffic is handled, not just specific apps or in a browser.

Using a VPN avoids one of Tor’s major pitfalls, which is the limited scope of what activities are covered. You don’t need to concern yourself with whether or not you can do something in the Tor Browser because a VPN protects your entire internet connection.

Fortunately, many of the best VPNs accept bitcoin as payment. This review by Secure Thoughts describes some of the top services, as well as how to go about setting up a connection. Some points to consider when you’re looking into a VPN are:

  • Do they keep logs?
  • How good is their customer service?
  • What devices are supported?
  • Cost and speed

Obviously, if you’re trying to stay totally incognito, using a VPN service that keeps logs of its users’ activities is a big no-no. HideMyAss is one such example, as they maintain logs (and their logs have been subpoenaed in the past).

That brings up another point worth mentioning: the location of a VPN’s host is equally important, as some governments can force companies to submit records or track activity.

Because you’re paying for a VPN, chances are you’ll want good customer service in the event of any difficulties. Most companies have gotten pretty good at this, but make sure to check what methods of contact are supported. Ideally you want the big three: phone, email, and chat.

If you’re using different devices, you’ll want to be sure yours is supported. Some VPNs only support Android and Windows, while others may only work for iOS. The better services work for all of the above, and may also allow you to connect multiple devices at once with a single subscription.

Price may be an issue as well; VPNs typically start around $5 a month, going as high as $15. More expensive isn’t always better, although sometimes it does mean better connection speeds. Remember that using any VPN has the potential to slightly lower your maximum connection speed, albeit unnoticeable in most cases.

Find out what’s best for you

As you can see, there are many different ways to help boost your privacy when shopping online with bitcoin. While some tools may work better than others, don’t close yourself off to the different possibilities. Each person’s circumstances are different, so make sure you research what’s best for you.

About the Author: Faith is an internet safety specialist and online freedom advocate. She blogs about a number of different topics, usually with a focus on helping users and businesses increase their security on the net.