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I am curious about privacy of bitcoin transactions. I heard that if you are good enough at hacking, you can get private data from bitcoin transaction, or associate someone to transaction. How is it possible? Is it possible to associate someone to transaction without IP (for example: I don't know IP, but know email or other private data), or is there some other ways to do so? Can someone explain this side of BTC transactions really well?

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IP addresses are not private information. As for email and name no one can get that information based on the blockchain data alone unless you go out of your way to publicly associate your identity with a specific address. For example by mentioning your email, name and address together on some website. Another possibility is that you reveal your identity to some service like a bitcoin exchange or payment processor and then send or receive bitcoin using that service. That service will now have some idea of what addresses belong to you simply because you used their service. The world at large will not know though.

Note also that you have many addresses in your wallet not just one address. Ideally you use a different address each time you want to receive bitcoin. This is better from a privacy and security standpoint. It also makes it easy for you to track who sent you how much by giving each person a different address for every transaction.

  • I understand what you say, but if you use exchange, then creating many different addresses won't help at all. Now, if I use software wallet, then there's no way for someone to trace back to me unless they aren't trying to find out my ip. – Nika Kurashvili Oct 8 '18 at 8:39
  • So on exchange, whatever we do it will be traceable and they will know that I receive and send bitcoins. but IF I use software wallet, why do I need to have different addresses? I can have one and never reveal my address and email together :) Am I right? – Nika Kurashvili Oct 8 '18 at 8:40
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    @NikaKhurashvili if you use only one address then anyone can see how much money you've received and how much you've sent. It also becomes hard to keep track of who sent you how much if you give everyone the same address. Because of this software wallets are designed to hand out different addresses each time you request one to receive bitcoin. So it is best to take advantage of that. Don't fixate on addresses too much. They should be treated as disposable one-time use invoice IDs. – Abdussamad Oct 8 '18 at 8:49
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    you try to insist... e.g. you use your address once to connect to an exchange. They know your details (KYC/AML, ...) Now you use the same address to order some books, and do some shopping. In all cases one can make the link between you and your identity. It is completly independent of your email address, if the book arrives at your home with a proper shipping address. However, if you use that address once to send some bitcoins to me, know one will (with highest probability) ever know, who is behind that address. Even I wouldn't know. Hence: use bitcoin addresses only once for highest privacy. – pebwindkraft Oct 8 '18 at 9:29
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    "If noone listens nodes" - the catch22... Yes, you can define "your" conditions, and you will stay anonymous. Be assured, even when using TOR, there are governmental agencies trying to listen, even setting up "false" TOR systems as exit gates. The way it is done cannot be answered here, and extends scope. But you might want to look at this intro youtube.com/watch?v=HScK4pkDNds and do research on bitcointalk.org and google for something like "bitcoin de-anonymization" - tons of links :-) – pebwindkraft Oct 8 '18 at 9:53

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