Opinion
[1]What is KYC bitcoin, and what steps can users concerned with privacy take to address the issues presented by KYC bitcoin?
What is KYC bitcoin, and what steps can users concerned with privacy take to address the issues presented by KYC bitcoin?
If you have spent time going down the rabbit hole of bitcoin or bought bitcoin from an exchange, then you have come across the term KYC[2] (Know Your Customer). You’ve also most likely participated in the process by handing over a ton of personal information to said exchange in order to purchase bitcoin. After your purchase you are holding what others call
“KYC bitcoin.”
What does that even mean? It means that your identity is now tied to the purchase of that bitcoin and the associated wallet address of where that bitcon resides as a UTXO (unspent transaction output).
Is KYC Bitcoin Really Bad?
If you place a high priority on privacy and freedom, then the short answer is yes. KYC bitcoin is a major piece of identifying data that can be used to track your transactions. Many believe that KYC goes against everything a Bitcoin maximalist believes in. The average user of bitcoin often knows no different. I will get into personal preferences and tools later on for those who wish to know more later on. This is not meant to be a guide for privacy, but to inform people of tools that I have used that can hopefully help them regain some privacy.
Performing a simple on-chain transaction of sending bitcoin from address to another is recorded on the Bitcoin public blockchain. If you have never done so or are curious, then I suggest looking at a Bitcoin block explorer, such as mempool.space[3], where
