Bitcoin Perfectly Anonymous — Until You Spend It

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.

Comments

Bitcoin users are working on a fix: CoinJoin

[Anonymous Coward]

Check it out, https://bitcointalk.org/index.php?topic=279249.0

Don't need anonymity ...

[PPH]

... for purchases. The gov't will see my garage full of Porsches and Ferraris and the yacht at the dock. What I need to do is to disconnect my means of income from expenditures.

No problem with taxes. I'll pay them. But I don't need the IRS snooping on my investments and calling their buddies with stock tips so they can front run me.

I used to work for an outfit that bid (but lost) a major IT contract to support IRS operations. The story was that they bid way below their cost. But they figured that getting their hands on taxpayer data and using it for their own purposes would more then make up for their loss. To this day I wonder what the contract winner is doing.

I wonder how contractors like Booz Alan Hamilton bid NSA contracts.

Re:Of course.

[lgw]

I'm unsure why people think Bitcoin is any kind of anonymous in the first place. Every transaction must be widely published for processing (in theory, ever miner can see every transaction). The entire money flow, every transaction worldwide, is known. Does anyone still think the NSA doesn't know every bitcoin transaction ever processed? Does anyone still think an IP address (with timestamp) is anonymous in any way?

The only anonymous in Bitcoin transaction is one where you hand someone the "wallet". Transferring your secrets, especially by hand, is as anonymous as handing cash to someone, but that's not really the intended model, or a particularly useful one.