Bitcoin Forum

If i use a different bitcoin address for every transaction, it is still possible to correlate my addresses?

If i leave one address here in my signature (for tip, lets say) and this address only serves this purpose, i will never use it in any other transaction; it is possible to correlate it with other of my addresses?

I am reading that bitcoin is not so anonymous like people think it is, BUT what are the possible falws here? I know that every transaction is public, but if "they" cant correlate transactions/addresses with each other, they have nothing, right?

Explain like i am five please  8)

Thank you

When you make a transaction, change goes back to an address controlled by you. That address might be used later by your wallet in another transaction. See how they are connected?
It only needs for one transaction you make to tie your name to it ....

It's only possible if you share the addresses by spend-linking, but if you send lots of money from one address to the other then people will likely be able to work it out. There's even a feature on blockchain.info which shows likely addresses that belong to you I believe.

if your income arrive from mining you're pretty safe in the anonymous regard, but bitcoin remain pseudo anon, you need to work a little to make it more anon

a good way is to have your initial amount divided in many addresses , so at best they can match only one with you, and never know that every one of those addresses belong to you

but aside from this in the event that they can associate an address with you, they don't know who you are, so it does not matter much

You could share a master public key instead of a lot of different address, i think it's way more convenient because that way when they pay you they generate a new address each time. For some reason this practice is not common. I think it should be the standard for people receiving payments on the same address for a while including people in sig campaigns.

If this is the problem, the wallet would control this by automatically exclude addresses already used! Every transaction MUST use a new address.

What am i missing here?

If you want to stay anonymous with transactions use http://bitmixer.io and always make sure you are on BITmixer not BTCmixer.

Thats not possible. There is no "from address", but blockchain explorers show it that way. The "from" address is the address you previously received bitcoin on and now want to spend. You cant just change the transaction someone else made for you in hindsight. If you want to avoid that inputs from different addresses are used you need to use a wallet (e.g. bitcoin core with coin control enabled) that allows you to select the inputs used yourself. That way you can use inputs that have been received by a single address and thus only this address shows as the "from" address on a blockchain explorer.

Yup.

But that's more like ELI10 i figured :)

It is always not anonymous like you think , When you have a wallet filled with change addresses, transactions will be forced to use some of those change addresses to fill transactions you want to make. The fact that the receiver is the same, and that the time of transaction is the same means that an outside observer will have a high confidence that those addresses belong to the same person. If all of those addresses only received bitcoins from a single address, it will be very clear they are change addresses for that address.
This is not necessarily a bad thing, as the tracability of transactions will make it harder.

I just want to fully understand bitcoin. Just to know the rules perfectly and play safe. ;)

I am not in pursuit of anonymity. Just want to know the "limits and the borders of this ship".

hmmmm, now i think i get it.

Transactions must have inputs, so if i use different addresses for every transaction, the inputs will be there to compromise me, every time. Is this correct?

Thank you for that post

Bitcoin Mixing can help you to achieve high level of anonymity , you send your money to an anonymous service and, if they are well-intentioned, they will send you someone else's tainted coins to you.


Through Mixing is is really good way but high volume mixing of bitcoins is Dangerous as the bixing company can Scam you , moreover Bitcoin transaction is irreversible.
http://tech.eu/wp-content/uploads/2014/05/Bitcoin-tumbler-mixer.png

As bitcoin developer Jeff Garzik put it, "Attempting major illicit transactions with bitcoin, given existing statistical analysis techniques deployed in the field by law enforcement, is pretty damned dumb."

Bitmixer.io won't scam anyone ( If they don't get hacked ) I transacted over 10 BTC in one TX and everything went well. I tried to find the sending address through my final transaction and I wasn't able to do it.

The only way someone could be totally anonymous is making a transaction with a newly generated block transaction, and of course, nobody knew the receipt neither that you generated the block.

Mixers aren't enough, it may take time to get to the right point in discovering the destination of the bitcoins, but if people really want to track down, it's just a matter of time.

I am not saying that they will scam you for sure but dude i have seen enough here legit people turning into black hole, Moreover It just a suggestion , even i have Doubled my BTCs on coinsdouble and they have legitly Paid me but it snot the same mirror for others too.

You Must Check it : https://bitcointalk.org/index.php?topic=83794.0

Yes and no. If your wallet picks inputs for you it might pick inputs than have been received via different addresses. E.g. if you want to spend 1 BTC to Alice and have 5 possible inputs to use sorted by age (oldest first):
- identifier - size (in BTC)
- 1B01... - 0.6
- 1B02... - 0.7
- 1B03... - 0.3
- 1B04... - 5.0
- 1B05... - 1.5

Your wallet might use the oldest inputs first, because that would give your TX a high priority (different topic, but its used to get TX with no or low fee confirmed). It would use 1B01 and 1B02, send 1 BTC to alice (1A01) and the rest (assume no fee for simplicity) 0.3 back to you as change (1B06). Now it is reasonable to assume for someone that sees this TX that you are in control of 1B01 and 1B02. On top of that Alice also knows that 1B06 is yours. Others might guess this if they know more about you and/or Alice and/or the transaction that took place.

If you yourself pick the inputs you could use 1B04 or 1B05 and you still have the "problem" with the change, but since you only use a single input it does not give away information about other addresses that are part of your wallet. A change address is for most wallets a freshly generated address so it would have no history either and would be a fresh input.

As you can see you will eventually run into the problem that you have no input that is large enough to avoid linking inputs. In this case you have to use a mixer or something else in order to move different inputs to a single new address.

You might now think that this could be avoided if you only ever used a single address. Which is true, but that also means that there is a single address that can be checked on any block explorer and anyone knows how much bitcoin you have, where they come from and where they go. Essentially it makes it worse.

Thank you for this nicely explained post.


Monero has the solution for this? If yes, it probably will rise fast and become a serious contender.

User A -> illegal drug money -> tumbler

User B -> illegal Ponzi money -> tumbler

User C -> terrorist financing -> tumbler

Tumble - Tumble - Tumble

Tumbler -> User A = illegal Ponzi money and terrorist financing

Tumbler -> User B = illegal drug money and terrorist financing

Tumbler -> User C = illegal drug money and illegal Ponzi money

User A, B, C -> Coinbase

Coinbase = Sorry we've confiscated your bitcoins because they were blacklisted.

LOL

Quote from Bitmixer:


anyone normal wants to stay anonymous

Alts are not my strong suit, sorry, but there are probably many alts that focus on anonymous transactions.


Coinbase does not care, AFAIK they actually do this or at least have done so at least once in the past.

Normal? Most normal people don't care or not to the point where they mix their money several times. I think the pseudo anonymity of bitcoin is enough for most people.

Of course a company making money mixing coins is going to say that. There is no reason to mix coins other than to hide your transactions. I'm not passing judgement. Who wants to pay taxes or be busted buying drugs? That doesn't sound like fun to me.

I do think tumblers work fairly well but you don't need to be fleeced by a tumbler service to hide your coins. Greg Maxwell was working on a service to do it for free. I'll see if I can find the thread and post it.

Seriously?

You wouldn't mind people knowing your salary?

You would be ok with your bitcoin company's profits being calculable from your payments to suppliers, customer receipts, etc?

i think i will invest in monero. it solves that problem.

monero cannot be used directly(i'm not aware of shops that accept it), you need at some point to return to bitcoin, at least try to use two exchanges to perform this

until zerocoin/darkwallet or some unknown sidechain will be implemented to solve this little issue the best solution is cryptonight at the moment

Like someone mentioned, if someone like Coinbase has a policy of investigating the origin of the Bitcoins you send and they find out they come from criminal activities then you are in trouble, even if you had NO IDEA that those coins were in Silk Road sometime ago. This really sucks and will hinder mainstream adoption. It kills fungibility. The average end user should not care about it and not have that worry on their mind. I myself avoid stuff like Coinbase because who the hell knows where the Bitcoins that you got come from? It's a joke, but I don't really see a way around this as long as the blockchain is an open ledger... any solutions?

Send them to an address that has a  lot of coin, then withdraw in different sized amounts
Exchanges, for example, maybe change coin types, do some trades if it makes you feel better.
Mixers
direct exchange to anon coins like monero using, say, shapeshift followed by back to xbt in another exchange.
All of the above make things pretty onerous for even resourcefull trackers.

This. You are absolutely right. I used Coinbase when I first heard about Bitcoin, because no fees.
Then I discovered that Coinbase, obviously, sucks. Good for me.

Bitcoin is not anonymous, it reveals your IP when you make transaction and its easy to correlate your addresses :/
In future i think it will be improved by protocol or 3rd party.

BTC can be traceable, and that's why dark markets' CEO went to jails, cause FBI can check their btc wallet to gather proofs. The best anon things should be monero or darkcoin, they are both best altcoins and anonymous coins, the addresses can't be traceable, so many criminals like them, maybe they will be huge in the future, who knows. Top 5 coin marketcap is possible for them.

Like others have said, it's not really possible to use Bitcoin anonymously. Even using it pseudonymously takes effort. You should at least always use a VPN or Tor when connecting to the network.

If you want to use Bitcoin pseudonymously, I recommend creating a number of different "identities" each of which has their own bitcoin wallet. Some of these identities can be "connected" and others should not be. For example, you could have identities Alice, Bob and Charlie, each of which has their own bitcoin wallet. Alice could be connected to your real life identity. You could send Alice some coins, but never Bob or Charlie. Alice could send you or Bob some coins, but never Charlie. Bob could send Alice or Charlie coins, but never you. Charlie can send coins to Bob, but no one else. In a picture:

You <-> Alice <-> Bob <-> Charlie

If you want to get serious, sending coins through the <-> links should use coinjoin or a mixer.

Note that since there are (at least) 4 different wallets here, the coins for the different identities can't be accidentally combined as inputs to a transaction.

I learned about this way of doing things through discussions with a friend who coded "idmas" -- it's a tool for using BIP0032 (HD Wallets) to create and manage identities like the kind above. It's free and open source -- this isn't an ad. But it doesn't have a GUI, so it's only for people comfortable with the command line.

https://github.com/cjbauer/idmas (https://github.com/cjbauer/idmas)
https://www.youtube.com/watch?v=abINpUxZwPI (https://www.youtube.com/watch?v=abINpUxZwPI)

Another recommendation I'd make is one that's probably hard for people who really believe in the potential of Bitcoin: stop talking to people about Bitcoin. In your everyday life, don't bring it up. If someone brings it up to you, just say it's an interesting technology, but that you're no longer interested in it as a currency/investment. You can, for example, use the block size debate as an excuse why you've divested. (I'm not saying divest. I'm saying don't trust people.)

Basically: Bitcoin is Fight Club.

Why not, everyone that wants the info on my salary can get it now anyway. In fact, if they can get my SSN they can get my tax records too.

I'm fine with business transparency. One of the problems we have with modern business is the lack of transparency. That's also one of the biggest problems with government.

Lol, use a proxy then problem solved. IPs are the least of your worries. Bitcoin is anon in that you have no idea who the person is. If I send money to you you don't know my real name or personal details.

Not to say I don't believe you, but the real point is that most people won't feel the way you say you do.

Your original statement implied that people only mix transactions if they're doing something shady. These examples are some of the other reasons.

If people didn't feel the way I do then they would pay for everything with cash. No one would use PayPal, credit cards, debit cards, checks or just about any other modern payment method. BTW: When I first started using checks they always put your SSN under your address and drivers licenses had your SSN on them too.

You should check out this (http://www.coindesk.com/how-anonymous-is-bitcoin/) article. It's exactly about this, everything is clear and simple to read even for Newbie. From my own experience, Bitcoin is pseudo-anonymous. You are anonymous when randomly sending transaction but you can be easily tracked when doing trades through exchanges. It depends on people if they want to stay anonymous or not.

Paypal, credit cards don't reveal your company profits, or your salary.

unless major istitutions like banks are forced by taxes man like IRS to reveal information about an individual which presumably he is doing money laundering or he is evading taxes with a big amount that wasn't declared previously..

they can control everything that can travel on any fiat circuit, that's why they fear bitcoin

https://github.com/justusranvier/wallet-ratings/blob/2015-2/2015-2/threat%20model.wiki

The only good way of mixing is to trade your BTC for other cryptocoins, there is no direct tie on the blockchain this way.

i don't care if banks/governments reveal information of criminals! it is good, actually.

i m worried that my neighbor knows everything about me! it is dangerous! people are envious.
bitcoin don't protect me of my neighbor. banks do.

Actually with xmr.to you can easily use Monero at any shop that accepts BTC. Very fast, secure and easy

Relevant to the discussion: https://www.reddit.com/r/Monero/comments/3ctjed/friendly_reminder_to_bitcoin_users_that_seek/

Yes, it's true.  "Bitcoin anonymity" is an oxymoron.

The closest we can get is Bitcoin obscurity, via various mixing schemes (http://crypsys.mmci.uni-saarland.de/projects/CoinShuffle/coinshuffle.pdf).

For everything else, there's Monero.   8)

how so, bitcoin can actully protect singular individual much better than bank, when you are dealing with your neighbor or spose

and anyway i don't find evading taxes always a criminal thing, at least until they can provide transparency on those taxers

how, if every transaction is online for everyone to see?!

you can mix it, there are various tool or ways(altcoin, using more than one exchange, mining, recieving bitcoin directly to different adresses ecc...) to help you stay more anonymous than dealing with fiat where every transaction is traceable

and you think that process is simple enough to population in general?? to bitcoin become success, processes MUST be simple. Nobody wants to learn how to mix, etc etc that is for geeks only! And geeks only wont make bitcoin a success!

banks, actually provide all the privacy common user wants. bitcoin dont.

With banks, only law enforcement (LE) can trace your (non-cash) fiat transactions.
With Bitcoin, everyody on the planet with just an internet connection and a copy of the blockchain is the LE.

how can a third party provide you pricacy, this is an oxymoron you know, in the exact time that your personal info are handled by someone else, you can't talk about privacy anymore

in the future anonimity with bitcoin will be made less troublesome for sure, for now if someone really want to stay anonimous he need to work a bit, i'm sure that if someone really have a reason to stay anonimous, he become suddenly a geek, you can be assured about this

Kinda true, but not really. For someone to bet the LE the guy would need clear proof that the address belongs to a real, particular person which is a very hard thing to prove.
Monero is great but I don't see it ever replacing BTC, you need a certain level of pseudo anonimity for something like that to work.
Is it true tho that Monero seems to be more e-cash than BTC is. But with both currencies, as soon as you go into fiat you lose anonimity, and with both currencies, if you stay within crypto it's pretty damn anonymous.

it is not to stay anonymous like im doing anything illegal!! i just want my privacy!! do you understand this?

and no! nobody (normal people) is going to become a geek to use bitcoin. people just keep using fiat money; it is the easiest way.

i am not a geek, i am not a criminal and i STILL want my privacy from my neighbors and friends. banks provide me this. bitcoin don't.

Think about where crypto-currencies are going though. The aim is eventually for users to stay in crypto, and not ever need to convert to FIAT.

In this scenario (I know it's a long way off) you surely need the crypto-currency to have the same fungibility as cash. Monero has this. Bitcoin does not.

Blockchain analysis is already performed, and some bitcoin is not accepted on particular exchanges because it has apparently been used for illicit purposes. I read of a service where you can buy freshly mined bitcoin at higher than the going rate = Bitcoin is not fungible.

Bitcoin is great, but relying on extra services, sidechains, mixing or whatever means trust will probably be required. Trust...  That's not true cash-like fungibility. For this, you need a trustless system like CryptoNote in Monero, IMO.

EDIT: corrected CryptoNight to CryptoNote

...

For me, all I care about is anonymity at the level of casual hackers (etc.), those who would try to steal "EASY BTC", unprotected.  Like burglars who choose easy targets...

I have no evidence, but my *guess* is that TPTB (IRS, perhaps other .govs) could crack mixers.  But, one would have to be a target.  Don't want to be a target?  Don't do illegal things.  Smaller, but more, transactions might help too.

The countermeasures we have right now are enough to get "Pretty Good Privacy" in that sense, anonymity vs. casual thieves.  Mixing BTC seems to be "good enough".  bitmixer.io and blockchain.info's SharedCoin service are enough for me.

*   *   *

justusranvier's link above is excellent for those ready for this level of technical understanding, as is iCEBREAKER's, thank you both for the links.

https://github.com/justusranvier/wallet-ratings/blob/2015-2/2015-2/threat%20model.wiki

http://crypsys.mmci.uni-saarland.de/projects/CoinShuffle/coinshuffle.pdf

want the anonimity, does not mean at all that you want to do illegal stuff, like satoshi said, what if i want to keep my privacy when i watch porn, because i don't want that my wife finds out?

you can't have your privacy iif you let another person in charge of your security ,no matter how you say it, it's an oxymoron....

I agree that anonymity is important or it's maybe better to use term financial privacy.

What if one day Bitcoin gets so big that companies will pay their workers in BTC. At current state, this would not be possible since everyone in company would know how much their colleagues make. This is not desirable. For this, we do need finacial privacy.

Anonymity is important, but if you honestly think proxy/Tor can stop LE or government surveillance, you're in for a rough surprise.

Monero and BTC compliment each other well. I suspect a small number of cryptocurrencies will dominate the market in the future. I've read some posters here claim that Monero could overtake Bitcoin someday due to it's privacy capabilities.

Glad you like the links.  Now you are ready for the red orange pill: https://www.youtube.com/watch?v=GEVm1dMn5Ks

Excuse my Godwin, but "Don't want to be a target?  Don't do illegal things." didn't work out so well for Anne Frank and several hundred million other victims of government sponsored/facilitated/catalyzed murder over the last century.

Darkwallet will probably do what you are looking for but it's still in beta.
but I think most people are happy with the pseudo anonymity offered by coinjoin

Well the only way to be more anonymous when dealing is using a mixer like bitmix and bitcoinfoggy as far as i know,
when an exchange was hacked the stolen bitcoin went to this bitcoinfoggy.
And the coins can't be tracked anymore

My comment above was limited to relative Bitcoin anonymity.  Car thieves will typically go after cars that are not locked (well, yes, Ferraris too).

Different kinds of threats and threat levels require different responses.  We all know what happened to Anne Frank.

GUNS and such have their role too.

Yes, and that's why crypto is, as far as export controls are concerned, classified as a munition.

Exercise your 2nd Amendment RKBA by owning and using both guns and Monero.

In the coming digital warfare, Monero is the equivalent of a Barrett rifle for purposes of reaching out and touching someone from a safe distance.   ;)

Well, yes, but, Survivalism 101 teaches us that you do not have to be able to outrun the bear in most situations.  You only have to be able to outrun some of your fellows.  So unless you are a Big Fish (lots of BTC) or leave your BTC easy to steal (or the info: who you buy from, BTC balance, etc.), mixing BTC is a "good enough solution", especially for the C-students among us (like me).

A .50?  Yow, even a .338 Lapua with muzzle brake would probably tear my arm off at my scrawny shoulder:

http://onlylongrange.com/bad-news-338-lapua-magnum/

A .338 is what Chris Kyle wound up shooting near the end of his career.  He liked the .338 because it shoots flatter.  I believe the Brit who has the world record took out the Taliban from 8100' used a .338.

If we make 10 different addresses and split the bitcoin to them and moving to an exchanger is this anonymity?
A good idea to me

It's not true 1:1 anonimity, it's just increased anonymity, to the point it's (as far as I know) imposible to know who the owner of the coins if after you withdraw them from the exchange, but if goverment or something asks the exchange for logs, they should know after that, but general public will not be able to know. For this to work 100% tho, when you withdraw the output address has to be shared with other transactions from other people, im not sure if this happens all the time. Someone should do a tutorial in how to get this right.

I see many transaction that on the left (input i think) has a lots of addressses and on the right lots of them.
Does this affect the anonymity ?

Bitcoin is actually not anonymous, but it's pseudo-anonymous. If you send just random transactions then you are anonymous, but if you want to buy something from bitfinex then you are not.

Absolutely spot-on, check walletexplorer.com out if you have doubts.

To clear up some terminology:
nickname, nom-de-plume, pen-name are all pseudonyms. People have abbreviated pseudonym as 'nym' for a long time too.

In bitcoin, your addresses are kinda like books you've published under a pen-name because they can all probably be linked together with some sophisticated blockchain analysis.
Once any one of those is tied to a real id (you buy from a site and give a postal address for example), then the nym is (potentially) outed.
So bitcoin is described as pseudonymous.

in the latter you're not anon only because your bank account is linked with your account on bitfinex, not because of bitcoin itself, can be easily avoided by using localbitcoin or bitcointalk to purchase bitcoin

There's a couple of problems with the fact that Bitcoin isn't anonymous. First is the lack of privacy. Blockchain analysis can be done by anyone, and means there is no privacy. Glenn Greenwald does an excellent talk on Why Privacy Matters: http://www.ted.com/talks/glenn_greenwald_why_privacy_matters (http://www.ted.com/talks/glenn_greenwald_why_privacy_matters).

The second problem is the fact that, anyone can end up with tainted or blacklisted coins, even though they have never taken part in any illicit transaction. So we are expected to use a mixing service to try and get "good" coins? And the coins you receive after mixing, well some of them could be tainted too. So, try again? I'd imagine a large proportion of transactions with Bitcoin are illicit, so chances are you'll have some tainted coins yourself.

I'd rather use a crypto which provides the essential privacy we need at the protocol level. Monero does this. It's only a matter of time until people realise the importance of this.

What is ths website about and how to use it? I don't understand what those numbers that are on the website means... can you please explain it to me?

It's exactly what it says - it correlates wallet addresses and transaction flows. For example, let's use DPR Seized Coins address, https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

https://www.walletexplorer.com/wallet/885d7317d7d3db17?from_address=1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

At the top, (The latest tranasctions on that address), you can see dust inputs after the US Marshall Service moved the coins on 2014-06-12 - This site keeps track of wallets/sites who likely own them, so you can see some of the dust was sent from :

Bitfinex
BetVIP.com
(And others unknown to the site, obviously).

Try using one of your own BTC addresses, you may be surprised, especially if you gamble or use different exchanges.

I remember watching the Bitstamp hacked address using this, and you could clearly see the criminals emptying out the wallet and sending coins to everything from other exchanges, to DNM's, to other wallets etc etc... Pretty much proves bitcoin is not anonymous to me, at least without proper mixing anyhow.  

I also look at like this - If this public site above can do that much sleuthing on the blockchain, just imagine what governments or independent researchers can do?!   :P

Hope that helps. ;)

Yes i think maybe everything is tracked, as long as nobody will keep a look at your transaction.
But some stolen bitcoin still has not been seen anywhere.

Maybe the thieves used some kind of Bitcoin Mixer / Tumbler for example bitmixer.io. It's pretty much amazing service because you can split the amount to unlimited addresses with 12%, 8%, 30%, 5%, 5%, 40% of the original amount or any other %...
Fee is just 0.0005 per address.

Well the thief were to smart when they stole the money.
I remember the bter exchange when was hacked and around 7100 BTC were stolen
They used soemthing like this to disappear the money.
Btw the fee is nothing per address on bitmixer lol

Yes, there's 0.0005 BTC fee for every forward address. Please, don't spam here if you don't know how it is.

Disable change addresses. They are the worst when it comes to reveal your bitcoin addresses. Then, always, when you want to do a transaction, think about from which address to send. If you don't want that an address is revealed, maybe because you are invested in a scam company with it, then send the funds to an exchange. Every transaction to that exchange let you give a new address there. You don't want them all go the same address. Then you can send them back and you have fresh coins.

If you sent already from one of your addresses then think about that too. Maybe you don't want that one of the receivers of the transactions does know that you sent to the other service and so on.

Simply use your brain and decide which amount to send from which address.

...

Somekindabitcoin has it right.  There is a bitmixer.io extra fee of BTC0.0005 per extra address added.

Potential users of bitmixer.io should carefully read their instructions, and follow them!

Same with new users of blockchain.info's SharedCoin.

yes many websites require to verify your account by ID
I dont understand these websites that requires to verify you account so deep.
That is absurd for these kind of trades, it's just bitcoin lol

But everytime you put money in an exchange the transaction is linked to some data of you, at least an IP and email address. Also, for the mixers you are trusting that they don't keep logs.. its centralized. Hopefully in the future there are better alternatives. It works for now tho and generally should give you a good level of anonymity if you want that.

yes, this is true but bitcoin is still pseudo-anonymous and it depends a lot on another factors

Basically true.. Bitcoin is pseudo-anonymous and it's already said in the article I posted here. When I read your previous post again and again, I got it better now, thanks :)