Let's examine a few additional best practices for enhancing your privacy on Bitcoin.

Owning your bitcoins in self-custody is great, but using your own full node is even better! Here's why having your own node is crucial for fully sovereign use of Bitcoin:

In addition to these benefits, using a full node also improves your confidentiality when broadcasting your transactions. When you issue a transaction, it is first created and signed via your wallet. To broadcast it on the Bitcoin network, it must be known by at least one node. By using your own node, you have direct control over this distribution, thereby reinforcing your confidentiality and limiting the risk of data leakage.

If you don't have your own Bitcoin node, you'll be forced to use a third-party one, such as the one offered by your wallet software provider. In addition to broadcasting transactions, your wallet requires access to various information such as pending transactions, balances associated with your addresses, and the number of confirmations for your transactions. To access all this data, you need to query a node.

The main risk when you're not using your own Bitcoin node is that the operator of the third-party node could observe your activities on the blockchain, or even share this information with other entities. To mitigate this risk, an intermediate solution is to use wallet software that masks your connections via the Tor network. This can reduce the exposure of your data. However, the optimal solution is to have your own Bitcoin node and use it to broadcast your transactions. Of course, you'll also need to be careful not to leak any information through your node, but that's another subject we'll look at in later sections.

Beyond the obvious advantage for your privacy, having your own full node also ensures the veracity of data on the blockchain, protects you against censorship, and allows you to actively participate in Bitcoin's governance. By using your own node, you contribute your economic weight to the chain of your choice, which is important during conflicts within the community, such as during the Blocksize War from 2015 to 2017, for example. In the event of a fork, using a third-party node could lead you to support a chain you don't want to favor, as the node operator makes the choice for you.

As you can see, in the interests of confidentiality and individual sovereignty, it's essential to run and use your own full node!

More broadly, it's essential to understand the heuristics we discussed in the previous section, so as to better avoid or deceive them. Adopting a series of best practices can be beneficial, even if they are not essential. They offer an extra layer of protection that can be important in maintaining confidentiality when using Bitcoin.

The first piece of advice I could give is to blend in with the densest crowd. On Bitcoin, this means using the most widely adopted script templates. For example, P2WSH scripts, often used for SegWit V0 multisig configurations, are very uncommon. They don't allow you to hide in a large anonymity set. The same applies to older models, such as P2PKH or P2SH. Although they are widely present in the UTXO set, they are used less and less for new transactions.

Generally speaking, it's wiser to opt for the most recent scripting standard, provided that it has been sufficiently adopted. So, if in 2022, I would have advised against using P2TR (Taproot) due to its low adoption, in 2024, I would recommend opting for this type of script instead, or failing that, for the SegWit V0 script, as the number of transactions using P2TR is starting to represent a very significant proportion.

Source: txstats.com

Another tip for preserving your confidentiality is to try to bypass internal transaction heuristics. For example, when making a payment, try to avoid creating an output with a rounded amount, as this could signal that the other output represents the change. If you need to send 100,000 sats to a friend, consider transferring a slightly higher amount to avoid this heuristic. Similarly, try not to create any change outputs that are disproportionately high in relation to the payment made, as this could also reveal which of the outputs represents the change.

Finally, if you carry out Bitcoin transactions on a regular basis, ensure that you don't always broadcast them simultaneously. By spreading the broadcast of your transactions throughout the day and week, you avoid giving outside observers the opportunity to detect a time-zone-based temporal pattern that could reinforce their analysis.

In addition to all these good practices to be adopted on a daily basis, there are even more effective methods for completely breaking the traceability of your bitcoins. These include, of course, coinjoin transactions, which we'll look at in depth in the next section.