IP Addresses and Cryptocurrencies
Cryptocurrency technology relies heavily on IP addresses, the unique numerical labels assigned to each computer connected to a network. As such, it is important for cryptocurrency users to understand the basics of how IP addresses work in order to use cryptocurrencies securely. This article explains what IP addresses are and how they are used in cryptocurrency transactions.
What Is an IP Address?
An Internet Protocol (IP) address is a unique string of numbers that identifies each device connected to the internet or any other computer network. All computers and mobile devices have their own individual IP address, which can be thought of as a digital street address that points them out from all the others on the same network. An example of an IPv4 address would be “192.168 .1 .1”; IPv6 addresses look like this: “2001:0db8:85a3:: 8a2e:0370 :7334”.
How Are IP Addresses Used In Cryptocurrency Transactions?
When you use digital currencies such as Bitcoin or Ethereum, every transaction you make is recorded on a public ledger known as a blockchain – with your respective wallet’s public key being associated with your transactional activity via its corresponding IP address(es). If someone wanted to track down where those coins originated from by looking at blockchain records, they could trace back their origins using your wallet’s public key along with its associated IP address(es). Consequently, it is important for users engaging in cryptocurrency-related activities online to do so over secure connections that hide their true identity by masking their real-world location through Tor networks or Virtual Private Networks (VPNs). This way they can avoid having anyone attempt tracking down their current whereabouts through analysis of publicly available data related to these transactions stored within blockchains like Bitcoin’s ledger system.
