It's a common situation: you want to use your bitcoin to make a transaction, but you're worried that you'll risk exposing your identity to hackers or blockchain analysts. How can you use your bitcoin to make payments without compromising your privacy? Taking these important steps can go a long way towards protecting your identity during your bitcoin transactions.

1. Buy Your Bitcoin With Cash

When you buy bitcoin with your bank account, Paypal account, credit card, or anything else connected with your real name, you create a trail that is easily traced. To avoid this, buy your bitcoins in a way that doesn't give away your personal information-- with cash. Localbitcoins.com and other sources can connect you with people in your area interested in trading their bitcoin for cash. Make sure that the seller you choose to trade with is well reviewed on the site, since meeting strangers from the internet when they know you are carrying cash can be risky. 

2. Use a Bitcoin Mixer

Once you've purchased your bitcoins, you'll need to use a bitcoin mixer like SmartMix to add another layer of anonymity. When you send your bitcoin to the SmartMix reserve, we mix it with the coins of all our other users. After mixing, you'll receive bitcoins back that have nothing to do with your previous transaction history-- now you're ready to make truly anonymous payments!

3. Keep bitcoins in an anonymous wallet

Web-based wallets like the onese you see on exchanges are not a secure place for you to store your bitcoin! If you want to keep your digital assets safe, make sure you are using a wallet that includes features that will protect your privacy and your identity. Look for:

• A wallet that generates a new address for every transaction
• A wallet that uses Tor or a VPN to anonymize your IP address. 
• A wallet that doesn't connect to third parties and has hardware wallet support.  -For extra security, use Trezor or Ledger for even better security

An anonymous bitcoin wallet with these features and following the steps above will make it virtually impossible for a third party to track you down. Stay safe and happy mixing!