Bitcoin is often described as “anonymous,” but in reality, it’s only pseudonymous. One of the biggest privacy pitfalls most users fall into is something that seems harmless at first: address reuse.
What is address reuse?
It’s the practice of receiving Bitcoin multiple times to the same wallet address. While it might seem convenient or efficient, it’s one of the easiest ways to compromise your privacy, and potentially the privacy of anyone you interact with.
Here’s why it’s risky:
• Every Bitcoin transaction is recorded on a public, permanent ledger.
• Reusing an address makes it easy for anyone analyzing the blockchain to link all associated transactions and balances to that address.
• It opens the door to tracking your behavior, spending patterns, and financial history.
• If you ever use the same address in both private and public contexts, you risk revealing personal or sensitive information without realizing it.
How to avoid address reuse:
• Use a wallet that generates a new address every time you receive BTC. Most modern wallets support this automatically, but double-check your settings.
• Choose a hierarchical deterministic (HD) wallet, which derives new addresses from a single backup phrase.
• Consider using privacy-enhancing tools such as PayJoin, CoinJoin, Samourai Wallet, or Wasabi Wallet for more robust protection.
It’s important to realize that address reuse doesn’t just affect one person.
If someone I send BTC to reuses their address elsewhere, it could reveal details about my transactions too. Privacy leaks can ripple through the network.
Questions for the community:
• Do you think most Bitcoin users understand the risks of reusing addresses?
• What are the best tools or strategies you use to protect your transaction privacy?
• Should wallets make new address generation mandatory by default?
Looking forward to hearing your thoughts and experiences. Let’s help each other (and especially newcomers) build better privacy habits when using Bitcoin.