There is a downside to blockchains being entirely transparent. Anyone can view the decentralized ledger of Bitcoin, for example, and keep track of the amounts sent and received from different addresses.
While a public address itself is not enough to track the person behind the transaction, an aspiring hacker can track the data packets being sent from an IP address itself, and consequently track you.
Even more worryingly, things like address re-use (a surprisingly common mistake) can help a hacker crack into your funds itself, causing you to lose your hard earned money.
So what to do? Stop using Bitcoin? Of course not. There are plenty of options out there for keeping your transactions (and you) anonymous while transacting your digital gold. From free mobile apps to expensive hardware wallets, anonymity solutions come in all shapes and sizes.
Let’s find the best anonymous Bitcoin wallets for you.
Not to be confused with the eponymous sword-wielding warriors, the Samourai wallet is one of the most private and anonymous bitcoin wallets out there.
Whilst relatively new in the game, its features are unmatched by its competition. It helps you keep your BTC transactions private, masks your identity, and secures your funds safely. The team behind the anonymous Bitcoin storage solution are actually privacy activists, who are extremely passionate about upholding the true spirit of Bitcoin.
While the app is still in its alpha version, it is already packed with an impressive list of features:
- Easy to use: The Samourai wallet has been designed with usability in mind, making things easier for newcomers and experts alike. As a result, the interface is sleek and uncluttered, with every useful option present at the forefront.
- No Address Reuse: The wallet generates a unique address to hide your spending habits, preventing hackers from piecing things together. Samourai also prevents unintentional address re-use by notifying you when you send Bitcoin to the same address more than once.
- Truly Anonymous: The application routes all traffic through Tor and VPNs (Virtual Private Networks) and also hides blockchain data. In addition, Samourai’s stealth mode hides the wallet from your home screen, launcher, app list, and recent apps, making it accessible only through a secret PIN code.
- CoinJoin: Transactions are broadcast publicly. This fact is often used by hackers to track specific transactions and attempt to trace them to their source. Samourai can use its STONEWALL technique to create transactions that resemble each other, confusing any potential hacker.
- Avoid linking previous change outputs: Cryptography is a very exact science. A person with sufficient knowledge of the field can pick up odds and ends from another’s transaction history, and attempt to find out their wallet’s key. Samourai prevents this by parsing all past transactions before building a new transaction to make sure it isn’t leaking valuable metadata about you and your wallet.
How to use the Samourai Wallet
First of all, get the app from the Google Play store and install it. Upon firing it up for the first time, the app will ask for a slew of permissions. Accepting through them all will get you a screen like this.
From the beginning, you have the option of enabling Tor.
Tor routes your network traffic through a convoluted set of relays, concealing your IP address and location, and bypassing any spyware watching your traffic. The only drawback is a slight penalty to internet speeds which is a small price to pay for security.
Check the box to connect to Tor.
In case you have used the Samourai wallet before, your device would have an encrypted backup of your last wallet which the app will detect automatically. Simply tap the ‘RESTORE’ option at the bottom to get your old wallet back. Keep the previous wallet’s pass-phrase handy though, because without it the encryption cannot be unlocked.
Alternatively, you may also want to move a wallet created somewhere else to Samourai. To do this, tap on the three-dot menu on the top right corner. From the drop-down that appears, select the ‘Import external wallet’ option. You can use the wallet seed to import it to Samourai without a hitch.
For now, we are going with the ‘START NEW WALLET’ option.
The pass-phrase, in case you are wondering, is just an expanded password. You are not limited to one word, instead choosing a collection of words, numbers, special characters.
You may want to randomize the phrase a bit though, instead of just using something predictable like your birthday. And make it long enough, with at least a dozen words to enhance its security.
Now, you need a PIN code as well. And no, you are not allowed to use your birthday for this one either, however tempting it may seem.
All the essential parts of the process are now complete. What comes next is an entirely optional choice to generate a PayNym ID for your wallet. What it does is basically create a ‘face’ for your account, allowing other users to send payments without you having to generate and share a public address each time.
This PayNym ID could be added to the address book, functioning as a unique address for each wallet.
Since there are no obvious downsides to getting a PayNym ID, you might as well take it.
It asks for your confirmation one last time, after which an alphanumeric string for your address is generated.
And voila! Your Samourai Wallet is ready to go!
How to Send Bitcoin with Samourai wallet
Transactions on the Samourai wallet are just too simple. See that ‘+’ button at the bottom right corner of the home screen? Tap that to bring up the transaction options.
Hitting the red button to send money by bringing up the send form. This includes the standard destination address, the BTC amount, and the transaction fees. At the end though, there is an extra option unique to Samourai.
The Ricochet option does exactly what you think; it sends your transaction bouncing through multiple recipients, obscuring the real source of the transaction to any malicious watchers. This is handy, if you don’t mind the extra charges, and have an important transaction to make.
Bringing up the triple dot menu reveals some useful options.
For example, you can view the current miner’s fees which is useful in deciding the right time to make your payments.
Or you can ‘Batch spend’ by clubbing a group of transactions into one block to save on miner fees.
Receiving Bitcoin in Samourai Wallet
Navigate to the home screen again. This time, after tapping on the ‘+’ button, hit the green ‘Receive’ tile.
This time there are fewer options; all that you need to receive tokens is to share your public address with the sender. This address is presented in two formats: an alphanumeric string of nonsense (which you should only copy and paste, not attempt to type out yourself) and a QR code for easy scanning using another mobile.
But once again, that’s not all. There is a list of advanced features, which are not necessary, but good to have if you know what you are doing. Hit the ‘Advanced’ option.
In this form, you have the option to request a particular amount (useful in case of a business settling bills via Bitcoin, for example) and select the address type. The default, Segwit, is the more secure form of addresses and is widespread today, but there are still a few that rely on the older protocols, which you can select if needed.
Tapping on the PayNyms option from the ‘+’ button brings up your PayNym ID, accompanied by your wallet’s unique address and a generated image.
The options this time aren’t particularly useful.
Tapping your PayNym ID opens up your address in a QR scannable format, from which you can share it with others easily.
Tapping the ‘+’ button brings different options than on the payment screen.
The buttons that come up are basically to ‘sign’ messages, and add other PayNyms contacts to your address book.
Signing is basically encrypting a text message with your private key, to verify that the message has indeed been sent by you.
Samourai is good if you are only intending to use BTC. However, if you intend to use other cryptos then Rahakott is the way to go.
The web-based application is a multi cryptocurrency wallet that supports a wide range of tokens and cryptos. It currently supports BTC, BCH, LTC, ZEC, and DASH. On top of that, it has a range of anonymity and privacy functions, which helps keep you and your funds safe.
Maybe the biggest draw is that new wallet users do not have to provide identifying documents. With Rahakott, you don’t need to provide your email, phone number, or even a username.
Some of its features are:-
- Algoristic Wallet – The biggest error that new Bitcoin users make is accidentally re-using addresses for multiple transactions. Rahakott avoids it by generating a new address each time you make a transaction. By doing this, you enhance your transaction’s anonymity.
- Anonymous Registration – As mentioned earlier, no identity proof is required to create a wallet. No emails, phone numbers, or usernames are needed to operate this wallet. The only thing you will need to get to your funds is a mnemonic phrase, which is a unique phrase consisting of 24 words generated by the website.
- Two Factor Authentication – To enhance security, you can enable two-factor authentication. This makes it mandatory to confirm transactions from your smartphone (like in bank transactions), making it more difficult for a hacker to steal your funds.
- Fully Encrypted Servers – All the servers the wallet uses are encrypted, so even its developers are not able to access the user’s wallet data. The data can only be accessed through the mnemonic phrase.
- Built-in Cryptocurrency Mixer – Blockchains are inherently transparent. This makes it a trivial matter for anyone to access your transaction records. To combat this, Rahakott features a built-in cryptocurrency tumbler (or mixer) that mixes the details of your transaction with others, combining them in a single block. This feature offers more privacy to public and transparent blockchains such as Bitcoin.
- Multi-Wallet Features – Rahakott is also able to generate multiple wallets in addition to the main BTC wallet which is created by default upon registration. Users can toggle between wallets, as well as rename or even delete them.
Getting Started with the Rahakott Wallet
As Rahakott is a web wallet, you don’t need to download anything. Just head to the website, and click on the ‘Create Wallet’ option on the top right corner.
The only thing that Rahakott asks you for is your language. Also, to prevent bots from crashing the servers through spurious requests, you will be required to enter a simple captcha. Click on the ‘Create new wallet’ to continue.
The app will straightaway generate a new seed for your wallet. Make sure to note down the twenty-four word mnemonic phrase in a safe and secure place; it is the only key to your funds. Once you have done so, click on the ‘I have saved everything button’.
Next up, you can select which cryptocurrencies you need separate wallets for. The Bitcoin (BTC) option is selected by default, so skipping this step is good for those who don’t wish anything else. Otherwise, there is Litecoin (LTC), Dash (DASH), Bitcoin Cash (BCH), Z Cash (ZEC), and Ethereum (ETH) to choose from. Hit the ‘Create Wallets’ button when you have made your selection.
And that’s it! You anonymous Bitcoin wallet is ready to use. In the next section, we will look at some of the basic functions of the wallet.
Receiving Bitcoin in Rahakott
Unlike other wallets, Rahakott believes in a minimalistic approach. As such, there is no separate receive form in the app. Instead, the home screen itself displays your public address directly for you to share.
This address will be generated fresh every time, so you don’t need to worry about address reuse. Also, you can click on the small refresh icon beside the address to manually generate a new one.
Apart from the long string of nonsense, the address also comes as a QR code and a sharable web URL. While the QR code is automatically displayed alongside the address, for the URL you need to click on the ‘Payment Request URL’ option.
The payment request URL is intended for receiving funds from unregistered users. Each person who sends on the URL will receive a unique address generated for them.
Sending Bitcoin in Rahakott Wallet
To access the send form, there are two methods. You can click on the paper plane ‘Send’ icon on the home screen (or deposit screen, as it is denoted). Alternatively, you can take your cursor to the ‘Wallet’ menu on the top right corner, and click on ‘Send’ in the drop-down menu.
The ‘Money Transfer’ screen opens up. It displays a simple form with just three fields: Recipient, Calculator, and Amount.
‘Recipient’ should be self-evident. Just enter the address of the account you wish to send funds to. The ‘Amount’ field, similarly, is for entering the BTC value that you wish to send. You can use the calculator to figure out the fiat currency value of your entered amount, by clicking on the ‘Calculate’ button.
It works both ways; filling either the fiat or the BTC amount will generate the equivalent in the other field on calculation. You can also select which currency you want your valuation in, from the US dollar (USD), euro (EUR), Chinese yuan (CNY), Japanese yen (JPY), and the Russian ruble (RUB).
There are two options you can toggle to further customize your transaction: ‘Subtract fees from amount’, and ‘Don’t use internal transfer’. Checking the first option saves you from having to add more amount for the transaction fees, but causes the recipient to be credited with the amount that is smaller by the size of the fee.
The second option is better left unchecked. A reduced fee is applied to internal transfers between Rahakott account holders, which are performed faster than external ones and without the involvement of the blockchain. Toggling it forces an external transfer, which is subject to the usual network commissions.
Managing Multiple Wallets
In case you have created multiple wallets, or want to create one, click on the ‘Main Wallet’ tab on top.
This will take you to the Wallets screen. This screen will list all the wallets that you have created with this account, accompanied by their respective balances. To switch to any one of them, simply click on it.
To create a new wallet, select the type of the wallet from the drop-down list, and click on the ‘Add’ button. The wallet will be instantly created. Here, you even have the option of creating Monero or Ethereum wallets as well.
Android and Web wallets are all good and fine, but what if you wish to store Bitcoin for long periods of time? How do you protect your funds in cold storage from being tracked and siphoned while you are not even using them?
The answer, of course, is to use a hardware wallet. And while wallets like Ledger or Trezor are well known and respected, there is something that they lack: Anonymity.
While it may not be a big issue for some, when you are entrusting a large fraction of your portfolio to a hardware wallet, it is better to be safe than sorry. With this in mind, we recommend the Bitlox hardware wallet.
BitLox is a hardware wallet that was designed to provide the best security possible for Bitcoin holdings.
To this end, the manufacturers of the wallet have taken its physical integrity to the extreme, with the case composed of titanium and aerospace alloys. Additionally, the BitLox wallet can generate about a hundred distinct wallets, with half of them capable of being hidden to be unlocked only by the individual PIN of that particular wallet, on top of the PIN for the device itself.
The Bitlox comes in three different models, depending on your security needs.
- BitLox Advanced: The basic model of Bitlox is made from aerospace alloys and comes with the capability to create a hundred different wallets. Each wallet is a fully hierarchical deterministic wallet (also known as an HD wallet). This means they can have an unlimited number of addresses, making this a perfect way to hide your Bitcoin in a variety of small-ish wallets and addresses. The cost of the BitLox Advanced is $98.
- BitLox Ultimate: The Ultimate differs from the Advanced only in the construction of its case, which is made from titanium instead of aerospace alloys. Aside from being virtually indestructible, it has basically the same safety and security features as the BitLox Advanced. This model costs $148.
- BitLox Extreme Privacy: This is the cream of the crop and the reason why we have included it in this guide. The BitLox Extreme Privacy comes with a military grade USB vault with the privacy-focused TAILS OS preinstalled. TAILS is basically a stripped down version of Linux that forces all its network traffic through TOR, making it impossible for your transmitted data to be tracked. As an added bonus, it encrypts all messages and files, allowing you to receive Bitcoin with complete anonymity. This Extreme Privacy version of BitLox costs $198.
All three BitLox models come with a full 5-year warranty and can be customized with up to three lines of laser engraved text or artwork. This customization option is not offered by any of its leading competitors, making it the only hardware wallet to offer such a service.
Though all said and done, its exceptional security features are the only reason to use BitLox over other hardware wallets. It complies with both BIP32 and BIP39 protocols, and is a fully hierarchical deterministic wallet with the ability to use up to a 24-word mnemonic code (Only at maximum security; the standard is a twelve-word mnemonic).
In a leg up over other hardware wallets, a PIN is required to unlock the device, and then a second PIN to unlock each individual wallet itself. You can even set PINs down to the transaction level if you are so inclined. Add to that its anti-device tampering methods such as the AEM, or ‘Anti Evil Maid’, and you get a wallet that is exceedingly difficult to crack.
In this age of 24/7 digital surveillance, it is crucial to cover your electronic steps, especially when it comes to financial transactions. This is especially important in crypto, due to its inherent transparency and online-only nature.
To this end, anonymous Bitcoin wallets are a must on every platform you use.
For mobile users, the Samourai wallet is the best option. Though relatively new, it is packed in features and security, ensuring that your funds remain safe in your own hands.
For those who prefer the desktop, there is no beating the Rahakott Web Wallet. Offering the ease of a web-based application with the security of an anonymous system, the Rahakott wallet strikes the perfect balance. Better yet, it can be accessed from anywhere on earth without any personal details, using only the mnemonic phrase.
Finally, for long term secure storage of your Bitcoins, you need to look no further than a Bitlox hardware wallet. The only hardware wallet to come pre-loaded with the privacy-focused Tails OS, the Bitlox wallet boasts of a slew of features and security to put a military grade USB to shame. That said, it isn’t exactly cheap, so it is best for storing large amounts of tokens in cold storage.