IP addresses are unique numeric addresses assigned to devices connected to the internet or a local network.
IP addresses are unique numeric addresses assigned to devices connected to the internet or a local network. IP, namely “internet protocol,” is the set of rules and regulations governing the data communication between devices via a local network or over the internet. In cryptocurrency, IP address awareness is important to maintain your privacy on the internet.
Fundamentally, IP addresses act as labels to locate the devices and permit the flow of data among them on a network. These labels carry local information and make accessibility convenient.
The internet requires means to discern between different devices interconnected on the internet and IP addresses provide the way to do so and are an essential part of the internet structure.
Your internet activity goes through your ISP as they offer you an internet connection.
After ensuring compliance with the internet protocols they route it back to you. Censorship of specific content or websites in certain countries is also done using IP addresses.
IP addresses can be classified into two domains: formats (IPv4 and IPv6 protocols) and types (dynamic and static). Let’s discuss them further!
The main concern when utilizing digital currencies is on-chain security and maintenance of privacy. Without on-chain security, sharing your private details on an exchange or address can make your identity and personal information available to the public on the blockchain. That said, security is about data leakage, and a secondary component after on-chain privacy is decoupling your IP address from your identity when utilizing cryptocurrency. IP Privacy is important in circumstances where being recognized as a crypto trader can put you at risk, especially in an authoritarian state.
Don't ignore on-chain security measures. If your on-chain information is public, there is no good reason for concealing your IP address. Stay away and avoid sharing your personal information with such crypto exchanges that lack on-chain protection measures.
The most ideal way of protecting your data is a virtual private network (VPN). Whether or not you are accessing a crypto exchange, it is better to use a VPN connection in order to prevent yourself from major hacks. If you are thinking about what is a VPN, a virtual private network is one where your location is steered off to an alternate geological area. That makes it impossible for your internet service provider to follow your online activities. Here, you replace your unique IP with the one provided by the VPN service. Therefore, no one can find your location, personal information, or crucial details using your IP address.
Join the thousands already learning crypto!