The popular belief of that Bitcoin is anonymous is false 

According to the analysts, sellers on the internet regularly report data about their operations, which can make it easier to locate personal data of the buyers.

Since the dawn of Bitcoin, it has been viewed as a secure means of payment that can be used anonymously by people for conducting various transactions. Even though the data is transmitted to the public ledger, the wallet addresses do not hold any sensitive information about their users. A growing number of vendors have taken the initiative to accept Bitcoins as payment.

Unfortunately, Bitcoin’s anonymity is not complete and as soon as your identity becomes connected to your Bitcoin address, the entire history of your actions will be uncovered and available to the public.

Considering such an imperfection, it’s important to understand how accessible is to connect a user’s purchases with their Bitcoin transactions.  

A researching team led by Princeton University professional has reported that information exposure during purchasing process easily reveals which Bitcoin transactions are made by certain users.  

This happens mainly due to web trackers and cookies, designed for transmitting user data to third parties. This data is being received by companies like Google & Facebook, which use it to analyze how exactly various people use various websites. Disturbingly, users’ names, addresses, and e-mails are transmitted occasionally. As a result, some of the transaction data becomes publicly available on the internet, so state officials or bad actors can parse it.

The researches made a goal to find out about how easy it is to connect identities to their Bitcoin activity. In order to do so, it’s necessary to have personal data and link it to a certain Bitcoin address. First, the team listed all the major merchants that accepted Bitcoin as payment. Second, they figured out how the information flows during purchases on these websites through web trackers. The outcome of this was that 53 of 130 sellers transmitted users’ personal information to at least 40 parties, most often from shopping cart pages.

Although most of the information was intentionally leaked for improving advertising, the researchers have found that there were some unintended transmissions with more sensitive data involved. These details pointed to specific transactions on the blockchain to a number of trackers. What makes matters worse, even if a user’s transaction kept hidden, it was still possible to connect it to the sender’s personal data using the amount and time of the purchase. Doing so is relatively easy: the investigator just needs to convert the amount to Bitcoins at the time of buy and search the ledger for the transactions with similar amount during that time. The transaction found will contain the sender’s address containing the entire history of their transactions.

Thankfully, there are some obstacles on the way of tracking down the transactions using the web tracker leaks. Firstly, sometimes the shipping cost is not being communicated, so the total purchase may be of a different amount. Secondly, a buyer may have a gap in time between viewing the cart and making the purchase, hence making it harder to track the accurate time of the transaction, since the blockchain has time stamps. Finally, Bitcoin price fluctuates across various exchanges, so it might be problematic to precisely convert the amount from the original currency. All these circumstances contribute to complicating the process of linking Bitcoin transactions and their owners, but it’s definitely possible in more than 60% of cases.

Nevertheless, there are certain ways to properly hide Bitcoin transactions. For instance, there are blending services like https://blender.io, which allow users to send their Bitcoin to the end of the reserve chain and receive the same amount back from the beginning of the chain. Additionally, services like Ghostery, AdBlock Plus, or uBlock Origin can be used so that to ensure the complete anonymity when buying something with Bitcoin. However, they have some drawbacks like occasionally missing trackers or blocking the purchases. 

The study made by the team provides a negative perspective for people, who prefer to stay undetected and positive perspective for state investigators. The team claims that like any other deanonymization attack on the network, their work will both have its advantages and disadvantages.