How to use crypto without doxing yourself (Lite)
Implementing the four steps of good address hygiene to protect your privacy
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Dear Crypto Natives,
What do each of these statements have in common?
“I just voted in Maker governance an hour ago!”
“Sure, just send the DAI to ethismoney.eth”
“OMG I won the PoolTogether lotto this week!”
“Just sent 1 ETH to a GitCoin grant”
Here’s the answer: each of them link an identity to an crypto address.
If you’re not careful with your crypto address hygiene, simple public statements like these have the ability to dox your full crypto transaction history to the world.
Yeah, not good.
Here’s a Bankless tactic for avoiding that.
Let’s level up!
How to use crypto without doxing yourself
How would you feel if your bank account was on display for the world to see? Your net worth, the assets you hold, how you spend your money—all public. That’s what happens when your identity is publicly linked to an ETH or BTC address you own. But with good address hygiene and a few rules of thumb you can avoid publicly doxing your accounts.
Goal: Learn good address hygiene so you don’t dox your accounts
Effort: 1-2 minutes of planning before you transact on the public ledger
ROI: Privacy—shield your account activity from the general public
Who’s this for?
Let’s set expectations. This tactic won’t help you shield your crypto activity from law enforcement or state-level actors. And it’s not great for hiding activity from the view of fiat-on ramps, centralized exchanges, or chain analysis companies. If you’re a criminal, well—I bet you’ll find cash and traditional banking way more useful than crypto.
This tactic is written to prevent Bankless readers from inadvertently linking their identity to their crypto addresses and exposing their transactions to the world. It’s really easy to slip up and lose your pseudonymity when using globally public ledgers like Ethereum and Bitcoin. So use this tactic to level up our efforts and preserve some basic privacy.
The first thing about crypto addresses
A public Ethereum address looks like this:
It’s public but it’s pseudonymous. There’s no indication as to who owns it. It could be anyone’s: maybe Coinbase, maybe Leo DiCaprio, maybe a kid in South Africa. Identity isn’t included in the Ethereum ledger.
But the minute I say publicly “Oh, that’s my address” it’s no longer pseudonymous. Now someone knows I owe it. And if I say it on Twitter, well…a lot of someone’s now know I own it. Including the chain analysis bot that’s parsing every tweet to cross-link twitter identities with crypto addresses.
Here are other ways to say this is my address without saying “this is my address”:
“I just paid .02 gwei in gas fees—why is gas so expensive rn?"
“Couldn’t get my MKR vote in, transaction failed. Can anyone help?”
Purchasing the ENS name of your twitter handle
“Psyched! Just bought an Avatar of Light GU card!!!”
Any of these statements can be used to link your identity to your Ethereum address. The .02 gwei comment? Just takes a query of all .02 gwei transactions by time range. The MKR transaction failure? Easy, look at the MKR votes that failed in the last hour.
Every transaction on Ethereum and Bitcoin is public. The fact that your identity isn’t linked to the address involved in the transaction is the only thing preserving your privacy. But if a link between address and identity is made—bye, bye privacy. You crypto bank account is now identified and on display to the world.
The second thing about crypto addresses
Here’s the second problem. Say you slipped up. Someone identified your address after a dumb comment you made on twitter. “It’s ok” you think. There’s only 10 transactions in the address and just a bit of ETH. You keep the bulk of your crypto holdings in a different address—your cold storage address. No big deal right?
You look at the transaction history.
The first transaction in your identified account was some DAI you sent to yourself. You moved the DAI there after minting it from a Maker loan. The Maker loan is held by your cold storage address. And your cold storage address is linked to your exposed account! Oof—that means your cold storage address is now linked to your identity.
The identification of one of your addresses reveals the identity of your others addresses that have transacted with it. See how easy this happens?
You doxed yourself badly because you didn’t have good address hygiene.
Bitcoin addresses work the same way. I’ve been talking about Ethereum addresses but the same is true of Bitcoin addresses. They are public but pseudonymous. If your identity is linked to a Bitcoin address then all the transactions associated with that address become linked to your identity.
So what’s the solution? Read the four steps below.
Good address hygiene—four steps to take now
Filling out the skill cube
Learning how good crypto addresses hygiene is not just important for privacy—it’s important for the security portion of the skill cube. Make it part of your routine!
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. I’ll always disclose when this is the case.