Changpeng ‘CZ’ Zhao, Binance’s Chief Executive Officer (CEO) has raised a very controversial topic in the crypto ecosystem regarding Bitcoin (BTC).
He has boldly stated that Bitcoin, unlike cash kept at home, is traceable as it leaves a digital trail. Zhao was trying to place the leading cryptocurrency by market capitalization side by side with traditional cash.
This traceability applies to other cryptocurrencies like Ethereum (ETH), Ripple’s XRP and many more.
Bitcoin Offers Credibility and Transparency
While this is not a subject that many Bitcoin enthusiasts like to dabble in, CZ is not far from the truth. The blockchain acts as a digital ledger which leaves a mark on every transaction that is made on it. This stamp is left accessible to the public like an open-book.
Many may consider this as a lack of privacy but it is worth noting that this same open-book policy is what provides the blockchain with its credibility and transparency. It is sort of a borderline between privacy and transparency.
Using Privacy Coin to Avoid Traceability
For those enthusiasts who are more concerned about their privacy, coins like Monero (XMR), ZCash (ZEC) and Dash (DASH) offer a way out. They are known as the ‘incognito browser’ of the crypto world.
Four years ago, an Europol official discovered that XMR transactions cannot be traced between the sender and receiver.
Specifically, XMR transactions do not show either IP transactions or coin movements upon analysis of their blockchain. Sadly, many crypto exchanges have began to delist these privacy-inclined coins due to regulatory pressures from the United States Securities and Exchange Commission (SEC).
Reducing Traceability With Crypto Mixers
There is also the option of Bitcoin and cryptocurrency mixers which are known to obfuscate the source of coins when they are introduced into the system. For context, they are identity-blocker service that takes recognized and ‘addressed’ crypto and mixes them with others in other to make them all untraceable, especially to their original sources.
One of such platforms is Tornado Cash. However, these platforms are often misused by bad actors to ‘clean’ their loot. Last year, Tornado Cash was sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) for helping criminals laundering over $7 billion.