51
The short answer is no. The long answer is split into three parts, each headed by a bold word.
I will talk about the existing privacy tools in Bitcoin.
I will talk about some pie-in-the-sky theoretical crypto which would achieve full anonymity (but which can't be done feasibly today).
I will talk about CryptoNote, its limitations, and feasible ways around ...
40
As I understand it, the "stealth address" is intended to address a very specific problem. If you wish to solicit payments from the public, say by posting a donation address on your website, then everyone can see on the block chain that all those payments went to you, and perhaps try to track how you spend them.
With a stealth address, you ask payers to ...
19
Short answer: yes, it will be anonymous
Long answer:
The following applies to all Cryptonote based coins, unless stated otherwise:
On the blockchain, all addresses are one time addresses. In Bitcoin, you are exhorted to not reuse addresses, but Monero enforces this. Every new transaction causes a new one time address to be generated, in such a way that ...
17
If your business partner knows your address, they can learn the transaction history and balance of that address. Often it is possible to guess or deduce that other addresses also belong to you, but this requires a bit more effort and is less reliable. However, this certainly doesn't translate to your complete wallet's balance and activity to be known.
This ...
15
If I'm sending someone my wallet-address, am I making my account balance visible to him?
Yes.
all transactions are public, means if I know the wallet address, I
can reconstruct the current account balance
Yes. All transactions of that address are in the blockchain, so they're public.
Owners of bitcoin addresses are not explicitly identified, but all ...
14
Alice wants to transfer 1 BTC from address A to address B
Bob wants to transfer 1 BTC from address C to address D
CoinJoin gives them a way to combine their transfers into a single transaction that has two inputs (A and C) and two outputs (B and D). Someone observing the blockchain no longer knows which one of the outputs is Alice's and which one is Bob's. ...
13
You can trace the coin back to its origin, the question is whether that information is meaningful.
Say I steal 50 bitcoin. I can pass them around between several different Bitcoin accounts, all mine, and you can trace them. The problem is, you don't know whether any of those transactions are real.
Say Jack has 50 bitcoins that come from a block reward and ...
11
It inevitably leaks information, but Bloom filters have a (controllable) false-positive rate. So a wallet client that is very concerned with privacy could make the false positive rate high enough so it becomes hard to distinguish which transactions the client was interested in.
11
First of, I am a Monero core developer. I'll try to remain as factual and objective as possible, though.
Now, for the simple answer: use Monero
And for the longer answer: read Andrew Poelstra's very informative reply.
I would also add the following:
Zero-Knowledge Proof has several of fundamental issues that may not even be fixable (from the less ...
11
When Bitcoin was invented, Blockchain analysis was not as advanced as it was today and pseudonymous transactions were believed to be closer to anonymous than they are with Bitcoin today. Under the current Bitcoin system, privacy can be greatly improved by avoiding fiat entry/exit ramps connected to your identity and by avoiding reusing BTC addresses.
Yes ...
10
This page on the bitcoin wiki explains the exact procedure for generating and using a stealth address. It's not very user friendly at this point in time and is considered experimental.
Simply:
Receiver generates a an address and a private secret and then sends
this address to someone who he wants payment from.
Sender uses the address and a "nonce" ...
10
Let's assume you're the outside observer. You see 1 BTC go from aaa to bbb, then from bbb to ccc, then from ccc to ddd, and them from ddd to zzz (zzz being associated with service Z). Can you see how easy it is to figure out that addresses aaa, bbb, ccc, and ddd belong to the same person?
It doesn't even get much better if you split the money to different ...
9
As a peer:
You can derive the approximate location (GeoIP for IPv4, latencies and allocations for IPv6) unless the node is operating as a hidden service.
You can query the node for it's version number.
You can query the node for current date and time.
You can query some of the nodes recent connections with the addr host discovery mechanism, giving you ...
9
One private key maps onto two addresses - one that uses an uncompressed public key, and one that uses a compressed public key.
What you might also be interested in is a deterministic wallet - a Bitcoin wallet holding multiple addresses generated from one private key / secret. This will let you secure multiple addresses and store only one key.
9
TCP and other stream based protocols do not have a 1-to-1 correlation of application level messages and IP packets. If you call send() 3 times, it might result in sending a single IP packet over the wire (eg, due to Nagle's algorithm which is enabled by default), it might get sent individually as 3 packets, as you would expect from a packet oriented protocol ...
8
For privacy, Bitcoin relies on "pseudonymity", which means that the only way people can choose not to disclose their identity, is by making it hard to link addresses to people/businesses/....
Publishing an address publicly obviously makes you give up that privacy, but that's not a problem. everyone is free to choose so of course. The problem is that it also ...
8
There's a bigger attack surface for someone that wants to doxx you. They only need to link a single transaction to your real life person to know all the transactions you've participated in. A single payment to newegg, for instance, will identify you across all transactions.
Very few transactions are completely anonymous. But yes, if they're all completely ...
8
I'm pretty sure that all crypto payment processors that deal with fiat <-> cryptocurrency exchanges are doing AML/KYC routines including chain analysis. That's not only true for BitPay and Coinbase but Circle et al. too. As soon as you're trying to move value between crypto and fiat you're going to have to deal with different levels of privacy invasions ...
8
A deanonymizing dust attack works by sending dust to large amounts of addresses. The assumption is that when people send transactions/perform consolidations in the future, dust from multiple addresses will be grouped into a single transaction, thus revealing many addresses controlled by a single entity, since the dust would be swept in a single tx.
(this ...
7
The other answers are correct, in that a mixed wallet can be used to hide tainted coins. However they miss an important point: the operator of the wallet service does have the knowledge required to trace the outbound transaction back to the original input coins, because both flows have to be associated with the wallet's internal representation of a customer ...
7
More accurately, the pseudonyms most commonly used are addresses, which are derived from public keys (not the longer public keys themselves).
In order for Bitcoin's idea to work, you must have coins that can only be spent by the owner of a given private key. This means that whatever you send to must be tied, in some way, to a public key.
Using arbitrary ...
7
It probably doesn't give you more security, and in fact if the mixer service's coin volumes are low, which they likely are, and dependent on whatever their turn around time may be, and dependent on how many coins you are asking them to mix, it is very possible for you to get back some of the same coins you sent to them. Unless they were verifiably in a ...
7
No.
All addresses generated by HD derivation are indistinguishable to someone who does not know the parent's master key (the private one for hardened derivation, the public one for normal derivation).
7
In Confidential Transactions (as used in Blockstream's Elements and Liquid), there are still identifiable UTXOs.
The only change is that instead of the amount, a homomorphic commitment to the amount is stored. While not technically correct, you could see it as a form of encryption that is compatible with addition and subtraction. So if a+b=c+d then E(a)+E(b)...
6
You are quite right that there are some drawbacks to reusing a bitcoin address, while at the same time it can be inconvenient to generate a new address each time.
I think you'll find its not possible to make an untraceable payment system where the money supply is limited. If money creation is controlled (as with bitcoin), nodes need a way to trace the ...
6
Anonymity:
Every transaction ever made in Bitcoin is public. You can see the most recent here:
https://blockexplorer.com/
What makes it anonymous, is that you may not know who owns which account number (Bitcoin address). If Privateinternetaccess picks a new receiving address for every transaction, it's very difficult for an outside person to see who is ...
6
When you send coins to a large shared wallet, chances are that the coins you withdraw won't be the same as the ones you deposited. That's how you can sever the taint trail.
The key is that the wallet must not only be large, but also shared between a lot of users.
The taint on the original coins would never go away but could be diluted by mixing them with "...
6
The term "Tainted Coins" is often misinterpreted as a measure of provenance. That's understandable considering the traditional definition of the word "tainted" coupled with the reality that many Bitcoins actually have been used for what would be considered nefarious purposes by standard societal norms. In fact, it is a common occurrence to be holding or ...
6
The factors that matter for any cash-out decision are:
Where are you located (country)?
How much are you looking to trade?
What type of cash are you looking to receive?
How soon do you need access to the proceeds?
Is privacy important?
In the U.S., Coinbase might be the simplest -- you can sell up to 100 BTC per day, with a fee of 1% and then from there ...
6
This is the zerocoin paper, but as far as I can tell, they haven't released source code yet, so all we can really do is speculate.
The single largest problem it has is that a zerocoin spend requires about 100x more disk space/bandwidth/cpu than a normal bitcoin transaction. However, the intended use case is that you use normal bitcoin transactions most of ...
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