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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.
Of course, nothing is really anonymous. It is just a cat and mouse game.
Everything I write is lies, read between the lines.
Check it out, https://bitcointalk.org/index.php?topic=279249.0
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.
1. If you mine them with a pool, and connect your wallet client to the net via a proxy or VPN, they may as well be anonymous.
2. There are bitcoin laundering / "tumbling" services available.
So, you mean if I have a transaction for $576.23 from Bob's Porn emporium, someone can sift through the transactions for $576.23 and figure out that was me?
Well, color me completely un-surprised. I'm not sure I've ever believed it was anonymous -- aren't the signatures of everyone who ever spent it tacked onto it?
Lost at C:>. Found at C.
One of the ways that you can increase anonymity with Bitcoin purchases is by issuing a different hash key for each different kind of transaction. There are other techniques for moving around large numbers of Bitcoins as well including swapping the coins between wallets.
I'll agree that the exchange of Bitcoins for government-backed currencies is particularly problematic as current exchange laws require all sorts of identification for such transactions. On the other hand, you can live "off the grid" and just exchange Bitcoins for stuff like food, shelter, clothing, and other stuff and not bother with pesky details of exchanging into a government currency.
Almost everything mentioned in the article as some sort of deep revelation was acknowledged by the developers and "fans" of Bitcoins on forums within weeks of the original software published by Satoshi was released.... and happened years ago. Talk about stale news. The only real news is that somebody with "credentials" in a "scholarly paper" has made the same claims.... thus it can be included on Wikipedia or some other similar website.
It's just a bit easier, simpler, convenient and cool.
But the postal service is cutting deliveries to bi-weekly. And it really didn't take very long.
... 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.
Have gnu, will travel.
Bitcoin is pseudonymous. Sure, the transaction history is public, but in regard to personally identifying information it only contains public keys, hashes of public keys, and signatures made using the corresponding private keys. Keys can be generated at will—one person can have a thousand different keys, or several people can share one (provided they trust each other).
Naturally, it's up to the user to avoid linking their keys to each other or to their real-world identity. You can avoid linking your IP address easily enough by connecting to the network via Tor or I2P. Avoiding a link to your real-world name and address is much harder when you're ordering physical goods or services.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
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.
In practical terms, buying things with cash is anonymous unless the transaction generates a paper trail or any recording isn't erased-over before someone looks at it or copies it.
Sure, currency usually has serial numbers and coins are relatively easy to lift fingerprints from, but I'm talking the practical, everyday world of buying groceries, etc. Yes, if the grocery store is robbed 10 minutes after you shop there, the police will probably see you on the security-camera playback. But in most cases, those recordings are erased without ever having been copied or seen after a few weeks or months.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
There's a saying:
*The graveyard is full of people who had the right of way*
Lead passes through paper fairly easily. There are no rules, except for the laws of physics.
“He’s not deformed, he’s just drunk!”
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.