1

Does it make a difference if I reuse the same bitcoin address with the same recipient or with a different recipient?

Example, I did a transaction with Alice with my ABC address.
Then...
Scenario A: I did my 2nd transaction with Alice (again) using the same ABC address.
Scenario B: I did my 2nd transaction with John using the same ABC address.

Will both scenarios compromise the security of my ABC address just the same, or will Scenario B impair the security much less?

In other words, can an attack/hack be done on my used address by anyone or just by the recipient/counterparty of the transaction?

Note:
This is not a question on being anonymous/private. This is a question on security/compromise.

2

I'll try answering this question in a way that allows you to re-use the technique on other privacy related questions. Generally any question about privacy boils down to WHAT information is divulged to WHO. Answering questions like this requires creating a model and taking each perspective into account. I'll take a simple model, we have three parties:

  1. You (Bob)
  2. Alice/John (receiver)
  3. Passive observer of the blockchain (someone analysing the blockchain)

Scenario A: I did my 2nd transaction with Alice (again) using the same ABC address.

Alice already knows the ABC address, so there is no information leak there.

The passive observer however sees a repetition of the address, it can link the two transactions to a single identity. This is terrible if they know the real name of that single identity, but even if they don't, it could someday become useful information.

Another issue arises, especially empirically, since address re-use is slowly becoming a thing of the past. The few services that do re-use addresses are also putting the finances of the senders at risk (Alice).

Generally only one sender belongs to all transactions going to ONE address.

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This is because most services generate an address for each customer, which they re-use.

Scenario B: I did my 2nd transaction with John using the same ABC address.

This would confuse the passive observer, as it could wrongly categorize the transaction from John and the one from Alice to come from the same sender.

However, the privacy leak to John is a lot larger and real. John can see how much Bob (you) received in the past. Re-using the address has exposed your transaction history and linked this address to you identity.

There are also situations where parties collude and share information, but that brings this question to the next level.

Scenario A is in most cases, the least worse of the two. In scenario B you divulged the real identity behind the address to two people, in scenario A only to one person.

  • No, identity issue in terms of being anonymous/private is NOT my question. My question is about the security of the address, identifying WHO (Alice, John, or anyone not part of the transaction) can hack into the private key of the address involved. – Dorky Jun 24 '17 at 10:41
  • There is no such things as "hacking into the private key of the address". – Penquin Jun 24 '17 at 10:50
  • What I meant to say, when we spend our bitcoin, our private key will be revealed to the blockchain and thus its security is slightly compromised. Thus it is recommended to use a new address with every new transaction. If an attacker/hacker wants to "brute-force" or whatever to figure out the private key, he/she will have access to the address and its funds. This is what I meant by hacking. Beside, my question is on security, not anonymity. – Dorky Jun 24 '17 at 12:44
  • "What I meant to say, when we spend our bitcoin, our private key will be revealed to the blockchain." It's the public key that gets revealed. Bruteforcing private keys is far beyond the capabilities of normal computers, the risk can be neglected, you don't have to worry about anyone hacking your address. But you are right tho, every time your make a signature public for a given public key, you are weakening its security. The attacker has more data and is more likely to be able to hack the address. But that would require a yet to be discovered cryptographic vulnerability in the client. – Penquin Jun 24 '17 at 15:28
  • Note that ECDSA is a tricky thing to get right, it's not as easy as you might think. The Bitcoin Core implementation has had a lot of eyes on its implementation but others clients haven't. – Penquin Jun 24 '17 at 15:59

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