Just like with every bullish cycle, the bear market that followed has been packed with multi-billion dollar liquidations, scams, and protocol breaches. The Terra/LUNA debacle caused major concern regarding stablecoins and affected both centralized and decentralized platforms. For this reason, the cryptocurrency market is undergoing heavy scrutiny from regulators, all over the globe.
Both exchanges and decentralized platforms are bound to undergo heavy regulations regarding KYC and identification processes. In turn, this could hinder one of cryptocurrency’s main advantages — anonymity. That said, there’s still some hope left for those that wish to remain anonymous in this ecosystem. Coins like Zcash focus on obfuscating transaction data on the blockchain and provide users with much-needed privacy.
In this article, we analyze the levels of anonymity of Bitcoin and Zcash and take a look at some alternatives to keeping your data private. To conclude, we will provide you with a foolproof method on how to convert BTC to ZEC completely anonymously using Godex. Let’s get started.
BTC to ZEC Exchange Pair: Level of Anonymity
There’s a general misconception with cryptocurrencies like Bitcoin that your transactions will remain anonymous. While this is true to a certain extent, the reality is a bit more complicated.
Creating a Bitcoin wallet doesn’t require your name or address, which means that your public address will remain anonymous. However, as soon as you start transacting on the BTC network, all of this data is immutably recorded on the ledger. Internet sleuths and, more importantly, criminals can easily trace this transaction data back to their owners.
What’s more, since transaction data is entirely transparent on Bitcoin, large transactions can be easily detected by government agencies and criminals. Consequently, crypto enthusiasts consider BTC transactions to be pseudonymous rather than anonymous.
Additionally, when sending coins on centralized exchanges, you will inevitably be asked to go through an identification procedure. To comply with AML regulations, exchanges are obligated to store your personal data on their servers. Worse even, in case of a data leak, your holdings can be exposed to malicious parties and put your person in danger.
To address this issue, privacy-focused cryptocurrencies like Zcash have emerged on the market. ZEC uses zero-knowledge proof to hide the transaction data and remove any sensitive information from blockchain transfers. This is why many crypto users opt for using ZEC instead of BTC for their long-term holdings.
Even More Anonymity: Decentralized Exchanges
Another alternative for remaining anonymous is decentralized exchanges (DEX). These platforms require no KYC whatsoever and don’t rely on a trusted third party. Instead, DEXes use smart contracts to make their services available to their users.
When using a DEX, users interact on the peer-to-peer network and send coins directly to each other. Or rather, they interact with the smart contract that has access to a pool of funds.
Nevertheless, since decentralized exchanges rely on smart contracts, they can only use smart-contract-capable tokens. This means that you won’t be able to exchange BTC or ZEC on a DEX.
So, what is the solution? Well, it’s somewhere in the middle. Anonymous crypto exchanges like Godex don’t require KYC procedures and provide you with quick and frictionless coin swaps. Let’s see how this works.
Exchange BTC for ZEC Anonymously With Godex
On Godex.io, you can easily swap BTC to ZEC and vice versa. And since the exchange doesn’t require registration, your personal data will never get shared with anyone.
Let’s have a look at the process in detail:
- First, visit the Godex.io web page.
- Select BTC on the left and ZEC on the right to convert BTC to ZEC and click on “Exchange.”
- Next, provide the amount of BTC you wish to exchange for ZEC.
- The app will prompt you for your ZEC address; paste it in the required field.
- Send the BTC to the exchange’s address to complete the transaction.
This way, your BTC will be converted to ZEC, and you will effectively remove any trace of your financial data from the blockchain.
Final Words
Anonymity is often underrated in blockchain technology. However, it’s an essential feature for those that wish to thoroughly secure their coins. Keeping your financial data confidential can be beneficial in many ways — the fewer people have access to it, the better.
Using Godex to convert BTC to ZEC is one of the easiest ways you can do this. The exchange provides a simple enough interface and a frictionless, registration-free experience, allowing swaps in only a couple of minutes.
