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Bitcoin Perfectly Anonymous — Until You Spend It

Posted by Unknown on from the cover-your-tracks dept.

jfruh writes "One of the great attractions of Bitcoin as a currency is that it's completely secure and anonymous. But according to researchers (PDF) from UC San Diego and George Mason University, that anonymity starts to vanish the minute you exchange bitcoin for real-world items or conventional currencies. The researchers tracked transactions across the Bitcoin ecosystem and found points where it would be easy for a government with subpeona power to find the identity of a Bitcoin user. They also concluded that the currency wasn't especially attractive for money-laundering purposes." Graph theory explains many things.

6 of 147 comments (clear)

  1. Of course. by ls671 · · Score: 3, Insightful

    Of course, nothing is really anonymous. It is just a cat and mouse game.

    --
    Everything I write is lies, read between the lines.
  2. Just like IRL by atom1c · · Score: 3, Insightful

    You can live a cash-only life in hopes of improving your odds at general anonymity, but every time you stand in front of a CCTV camera you are exposing yourself to the world.

  3. Re:The answer is more maple syrup by Zontar+The+Mindless · · Score: 3, Insightful

    So in other words, it's a lot like cash, but less likely to bear trace amounts of cocaine?

    --
    Il n'y a pas de Planet B.
  4. Re:Is anybody surprised? by maxwell+demon · · Score: 3, Insightful

    If they can prove that your bitcoin came from the money laundering bank, they got you for money laundering. No link to the original crime necessary for that, since money laundering is a crime itself. They'll probably also find hints about the true origin when they study your confiscated computers.

    --
    The Tao of math: The numbers you can count are not the real numbers.
  5. double spend. by Anonymous Coward · · Score: 2, Insightful

    The problem with passing someone a wallet (or single private key) is that the recipient has no guarantee that you did not save a copy somewhere. And if you did, then you can spend the funds at any time.

    So the only way it can really work is if the recipient immediately sends the funds to another address while both parties are present, or the recipient 100% trusts the other party.

    This is the double-spend problem that makes decentralized digital currencies a hard problem and that bitcoin mining solves.

  6. Re:Bitcoin users are working on a fix: CoinJoin by Anonymous Coward · · Score: 2, Insightful

    Meh, sounds a lot like a Hawala network.