Consumer Protection Tuesday: How to Protect Your Privacy Onchain

At Coinbase we’re committed to updating the financial system while protecting our users’ personal data and privacy both onchain and offchain. Privacy remains a top priority as the onchain ecosystem expands and more users use apps and protocols leveraging blockchain technology. 

Follow the tips below to protect your privacy and data onchain. 

Onchain Privacy Tips

#1 - Learn about cryptocurrency and blockchain technology - Blockchain is a revolutionary technology that decentralizes and distributes data processing in a secure, transparent, and immutable manner. To learn more about how cryptocurrency and blockchain technology work, explore the resources below:

• What is Cryptocurrency?

• Crypto Basics

• What is a Blockchain?

#2 - Be mindful that onchain transactions are public and permanent – By design, your wallet addresses can be shared with others to participate in the onchain economy. On their own, wallets may not reveal much data about you, but when you send/receive onchain transactions, expect that these transactions will be publicly available to anyone who wishes to see them. Blockchain explorers make it easy for anyone to look up a specific transaction, or look at your wallet’s transaction history and your interactions with other wallets across a period of time.

#3 - Educate yourself about how onchain apps use your data – Carefully read the applicable Privacy Policy and any other available documentation (e.g. FAQ) for onchain apps you are interacting with. This will help you understand and have informed expectations about: 

• What personal data will be collected, processed, or stored

• How your data will be used and shared

• If any personal data will be processed/stored onchain

#4 - Consider your privacy when linking your public wallet address to your offchain personal data or identity – Publicly linking your wallet address to other personal data or using apps that store your personal data directly onchain makes it easier for anyone to associate your public wallet address and transactions with your “real-world” identity. Make sure you are comfortable with this data being permanently and publicly linked before connecting or linking your onchain and offchain data. Monitor your onchain footprint as over time your blockchain activity can build a traceable record.

Examples: 

• Onchain data registries or data consortiums that could store your “real world” personal attributes onchain

• Onchain ride share apps that could store driver, rider, and/or location data onchain

• Crypto tax solutions that may track your activity across exchanges and correlate this with your offchain financial accounts or data

• Onchain social media protocols and profiles (particularly when using personal data like full name or date of birth in usernames or profiles)

  • When creating an ENS name, Basename, or similar, some users use an alias or nickname that doesn’t reveal or tie to anything about their real-world identity, helping preserve their privacy onchain.

  • Others choose to include personal data elements (like name or year of birth) in their ENS name, Basename, or similar (e.g. JohnDoe1970). While this may make it easier for friends and family to remember, anyone will be able to see that your public wallet address and all related transactions are likely tied to someone named John Doe born in 1970.

#5 - Vet privacy protocols and applications before use  – New onchain protocols that protect privacy and anonymity using technologies like zero-knowledge proofs are emerging. Keep in mind that these solutions:

• Offer varying degrees and levels of privacy

• Use different mechanisms (with different pros and cons) to preserve privacy

Do not assume that these types of protocols/applications will provide complete anonymity. Research the technology used to understand any limitations or downsides that may impact your privacy.