Slashdot Mirror
Bitcoin Is Not Anonymous After All
Taco Cowboy points out a new study that shows it is possible to figure out the IP address of someone who pays for transactions anonymously online using bitcoins. "The Bitcoin system is not managed by a central authority, but relies on a peer-to-peer network on the Internet. Anyone can join the network as a user or provide computing capacity to process the transactions. In the network, the user's identity is hidden behind a cryptographic pseudonym, which can be changed as often as is wanted. Transactions are signed with this pseudonym and broadcast to the public network to verify their authenticity and attribute the Bitcoins to the new owner. In their new study, researchers at the Laboratory of Algorithmics, Cryptology and Security of the University of Luxembourg have shown that Bitcoin does not protect user's IP address and that it can be linked to the user's transactions in real-time. To find this out, a hacker would need only a few computers and about €1500 per month for server and traffic costs. Moreover, the popular anonymization network "Tor" can do little to guarantee Bitcoin user's anonymity, since it can be blocked easily."
Anonymity was never a feature. Whoever thought that didn't read the bitcoin summary. ;) You not only know where it came from, you know where it has been, too.
The only reason it is popular is that governments didn't have tracking in place so it gained popularity as a currency for drug purchases. They do now have that tracking in place, however, so that ship sailed.
I think the paranoid anti-government crowd are just not good enough at comprehension to know what they're saying or why. They heard that bitcoin was anti-government, so they decided it must be full of magical anonymous unicorns with anonymous rainbow farts.
Who thought bitcoin was anonymous? It is a detailed, immutable list of transactions... it is downright transparent...