Privacy with Nano

Nano puts you in control of your privacy. You are responsible for protecting it and deciding when to reveal it.

All transactions are stored publicly and permanently on the network, which means anyone can look up the balance and transactions of any account. However, the identity of an account holder remains unknown until a link is made to a known account through a transaction or in other circumstances.

With more time and development, there will be services and wallets with built-in privacy-minded strategies that make it effortless to protect and manage your privacy. In the meantime, follow these best practices to safeguard your privacy.

You should use a new Nano address each time you receive a new transaction. Remember, accounts are free and infinite. A single seed can generate 4,294,967,295 accounts.

Note: this is something future wallets will automatically manage for you

It is good practice to use multiple accounts for different purposes. Doing so allows you to isolate each of your transactions in such a way that it is not possible to associate them all together. This prevents people who send you money from seeing what other addresses you own, how much you have, and what you do with it.

Be mindful when you transact with an identifiable public account, like a tip address, as a link is established. Anyone who can identify your tip address is now aware of the account you linked to it.

Note: Use a wallet that allows you to label accounts

You can use an exchange to create separation between your accounts by depositing Nano and making multiple withdrawals to new addresses. This makes it difficult for anyone aware of your previous account to track you, like when you withdraw from a public tip bot address.

Exchanges will generally allow free deposits and charge a small fee for withdrawals (i.e. Ӿ 0.01). Withdrawals from exchanges come from a single account that pools everyone's deposits together, making it difficult for an outsider to establish a link between a deposit and a withdrawal. To further obfuscate the link, it is good practice to scatter your withdrawals over some time.

To further protect your privacy, create a new exchange account for this process and do not verify your identity.

Note: with more time and development, this sort of obfuscation can be automated and built into wallets such that it is convenient, free, and trustless using multi-sig.

The majority of exchanges and services will require some level of "Know your customer" (KYC), as it is a regulation that any business with a banking relationship has to abide by. These rules are imposed worldwide and are geared towards ensuring that a business acting as a money exchange and/or transmitter has ‘suitable’ information on every customer they serve.

Name
Address
Phone number
Drivers license
Government ID
A selfie holding a piece of paper with the name of the exchange and the date

KYC information ties your identity to any nano you purchase. The exchange or service can know

How much you bought
When you bought it
Your banking information
Where you withdraw to

A centralized collection of sensitive and personal information creates an attraction and puts your privacy at risk of being leaked due to incompetent security practices.