VPN’s, IP addresses, Blockchain Data and Cryptocurrency transactions?

Bitcoin Questions and AnswersCategory: General questionsVPN’s, IP addresses, Blockchain Data and Cryptocurrency transactions?

George asked 2 months ago

I’m not really sure what tracking/transaction data is added to the blockchain and was wondering if I use a VPN (even coupled with Tor browser), would harm or corrupt the data stored in the blockchain, and thus make me loose by cryptos? If it does not harm the transaction can a VPN really keep a transactions anonymous and protect my crypto accounts?

1 Answers
Steven Hay answered 2 months ago

Hi George,
 
Sure, go ahead and use a VPN or Tor. I believe the latest versions of Bitcoin Core will connect via Tor automatically if they detect that it’s running. Quite a few other Bitcoin wallets also support Tor.
 
There’s no possibility of corruption or other negative effects from disguising your IP address via Tor and / or a VPN, at least not as far as I’m aware. It’s a sensible precaution to take, in my opinion. While your real identity isn’t associated with your Bitcoin addresses (at least until you sign up for exchanges and other services using your identity info), it’s possible for listening nodes to link an IP to your addresses over time.
 
Of course, it’s always possible to obscure your trail in future. Perhaps the easiest method would be to buy a privacy coin like Monero then trade back into Bitcoin, which you store in a new wallet. It’s fairly easy to achieve a good level of financial privacy with cryptocurrency if you familiarize yourself with such methods.

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