Bitcoin Forum

If I buy Bitcoins off my bank card, will it be completely anonymous to the bank to where my money has gone? For instance if I buy them off my card on TOR, will I be traceable? As in my IP, where the money has gone or my address? I don't want them to see my account, wallet or know anything about me.

I'm new here as you can see, so I have very little understanding of how things work or alot of the technical terms I have read which have made no sense to me. I'd appreciate help.

Also, I've heard that Bitcoins aren't secure and can be stolen, am I suppose to put them on a USB stick? Thanks :D

I'm just trying to learn the inns and outs at the moment of how things work.

Your question as to how the transaction appears to my bank is a good one, an one that im interested myself but just not thought of!

with regards to securing your wallet have a read of this https://bitcointalk.org/index.php?topic=17240.0

It will really depend on how you go about acquiring your bitcoins.  If you withdraw cash from the bank and use the cash to purchase your bitcoins from somewhere like BitInstant, then the bank can't/won't know that you acquired bitcoins with the money.

If on the other hand you use mtGox to acquire your bitcoins and use their "Bank Transfer" method of funding the account then the bank will almost certainly be able to tell that the money went to mtGox and could reasonably assume that they were used for the purpose of purchasing bitcoins.

Depending on what bitcoin wallet system you choose, your access to your bitcoins will likely be controlled by your wallet file.  If you don't protect this file and someone else gains access to it, they will be able to spend your bitcoins.  You can encrypt the file, but if you lose or can't remember your password you will no longer be able to spend your bitcoins.  They will be lost forever.  Nobody will be able to "reset" or "recover" your password for you.  If you choose a password that isn't complicated enough, and someone gets access to the file and guesses your password, they can spend your bitcoins.  Access can mean they hack in to your computer, or that you acquire a computer virus or trojan program that steals wallet files.  Storing the wallet file on a USB drive can reduce the opportunity for others to gain access to the file, but it is still possible for them to gain access when you plug the USB into a computer if the computer is already compromised.

If you loose access to the wallet file (such as in a hard drive crash, or losing your USB drive) you will no longer be able to spend your bitcoins and they will be lost forever (nobody will be able to recover them for you).

Fortunately, since it is just a computer file, you can create regular backups.  This way if the file is damaged/lost, you can recover the backup and regain access to your bitcoins.  However you must be careful to not store your backups somewhere that someone else can access them, and be careful that you are reliably able to recover the backup.

There are some wallet solutions that reduce some of these risks for you.  If you set up an account with mtGox, they will provide you with a bitcoin address where you can have coins sent, and you can send coins directly to others from your mtGox account.  This works even if you don't send any non-bitcoin money to them at all.  They take care of storing the wallet file and securing it from theft.  Unfortunately you then have to trust that mtGox won't suddenly decide to run off with all the bitcoins that are deposited with them, and you have to trust that they will do a good job of securing the bitcoins from theft.

Until you understand the risks involved and have a decent understanding of what a few of the wallet providers have to offer in the way of risks and features, I'd suggest not maintaining more bitcoins at any one time than you are willing to accidentally lose.  Then as you gain a better understanding of what you need to do and what is available to help you, you could increase your bitcoin holdings as you see fit.

I think that's probably where you are misunderstanding what options are available to you.

There are nearly no sellers who accept a payment card for the purchase of bitcoins.

The few that do will definitely have their merchant account name appear on your bank statement.  For instance, VirWoX:
 - http://www.VirWoX.com    <---   Buy Second Life Lindens (SLLs) then trade SLLs for BTCs.

LiqPay is another, used by BTC-e.com for instance.

Here's another ... but they have a delay of delivery from five to eight days:
 - http://www.bitcoinroad.com/bitcoin-store.html

Thanks guys, hmm I thought Tor was very anonymous? If I buy off Tor and my bank decided to try and track what I've bought or where it is going, can they?
Or will they just see money leave my account... Out into the internet... And BAM! The moneys gone? :D So the buyer can't be traced, the sender can't be traced and my delivery address cant be traced.

Going off that I got the impression I could buy Bitcoins and nobody will know I ever did.

I haven't opened a wallet yet, I guess I will try and do that somehow soon, don't wanna put anything in it. Just understand it, I want my wallet anonymous too though with none of my personal details. Just like a blank wallet with just cash in it if that makes sense.


Thanks.

If you go through a bank your anonymity is lost. No exceptions.

Sad but true

That's the conclusion I arrived at as well, so I switched to using coinbase. The fees are silly low.

TOR only hides internet traffic coming from and going to your computer.  It makes it so that people can't track where the internet traffic arriving at your computer is coming from, and people can't see where the internet traffic leaving your computer is going to.  If you aren't careful, you can easily give up your anonymity while you are on TOR.  Example.  When you browse your bank's public website through TOR without logging in to the bank website, they (and anyone else trying to figure it out) can't tell that it is you browsing the site.  As soon as you use your userID to log into the site, the bank (obviously) immediately knows it is you even though they can't trace the traffic back to your IP address.

When transferring non-bitcoin money electronically, the bank doesn't just "put it out on the internet".  It has to communicate with the specific entity that will be receiving the money.  That entity communicates back.  So if you log in to mtGox, and enter your bank account information to do a "bank transfer", your communication between you and mtGox is over TOR, but mtGox knows who you are since you've provided your login credentials and bank account information.  Then mtGox has to communicate with the bank telling the bank that it is supposed to send them some money.  This communication between mtGox and the bank is NOT over TOR.  mtGox has to identify themselves to the bank by identifying where your bank should transfer the money to. They have to provide proof that you have given permission for your money to be removed from your account and sent to them.

The only way to keep the bank from communicating with the whoever you are sending the money to, is to use some trusted third party to receive the money from the bank and then send it on to wherever you will be purchasing the bitcoin.  This third party has to be trusted, because they will have access to your bank account information AND will know you are purchasing bitcoins.  The BEST trusted third person is yourself.  You can accomplish this by withdrawing CASH from the bank.  At that time, all the bank knows is that you have cash, they don't know what you are going to do with it.  Then when you spend the cash to purchase bitcoins, only you and the entity your are purchasing from know that your are purchasing bitcoins (and they don't know where you got the money).

If you use TOR and set up a web hosted bitcoin wallet at blockchain.info, then you should be anonymous.  blockchain.info (and anybody else) won't know that you are the person with access to that wallet.  Of course, the first time you forget and connect to your blockchain.info wallet without TOR, you create a link between you and the wallet that can be forever remembered even if you go back to using TOR, so you'll have to be careful to ALWAYS make sure that any connections to your blockchain.info wallet are through TOR.  It will be an empty wallet until you find a way to get your bitcoins.  And if you purchase your bitcoins in a way that reveals your identity, then blockchain.info and others will be able to trace the movement of bitcoin revealing that you are the one who owns that wallet.  Therefore, you'll want to be careful about how you acquire and spend your bitcoins so that they can't be traced back to you.

As you know Bitcoin is a decentralized, digital currency that can be used like cash. What many people may not already know however is that there is no need to hand over all of your information to an exchange to buy bitcoins. It is already extremely easy to buy bitcoins anonymously, in less than 10 minutes.

signs melbourne (http://www.letragrafic.com.au/)

Hmm interesting, what if I buy off someone else's bank card, with or without there permission, it doesn't matter. Can I be traced at all if that was the case?
Or will my wallet which is floating about on the net be a target to trace back to me? Thanks.

Take a look at this on my blog: bitcoinsbs.wordpress.com/2012/11/25/anonymous-transactions/

I am also currently working a tool that leverages Maltego for visualization so that transactions can be easily visualized.  I have it mostly working.  now i just need to fine tune it.  I know there are tools like it out there, I see the visualization graphs all over the place.

The key is that if any address ever touches an address that can be associated with an identifiable person or entity, then the anonymity is broken.   The assumption that anonymity exists is a false one.  It might provide some level of obscurity, but if you are doing something illegal the authorities have the tools to find you if they desire.  its worth mentioning, they are in no rush, after all the block change is a historical record of sorts.

Also if you are new and want a step by step guide check out my book, see signature :-)

You shouldnt just assume because you use bitcoins you are anonymous.

But bitcoin + TOR + tunneling your Bitcoins through a few web wallets before you buy something with them or cash them out if you are a seller and you are untraceable in practice.

I think I see what you mean, so if I buy so many coins, off a card which isn't mine, and the owners bank wanted to find me, they will just trace the wallet to which the coins were sent too? But if the wallet has been opened purely through TOR anyway, then when I spend the coins they could track where the coins have been spent on, and then get my address from the delivery address from what ever I have bought? That right?

I'm using examples here to help myself understand the system. Thanks.

Bottom line : if you really want to be that anonymous you wanna know exactly what you're doing, so you got to understand exactly how it all works. Read up (http://bitcoin.org/bitcoin.pdf) :)

Unless you use them and that person is not concerned with being anonymous.  The trail might start there and a little investigative work and your found.

Quick question if I may :

Does this mean that if I dont Bitcoin+TOR+tunneling some1 can link up my BC address with, like, an IP adress  ???

Regards

That depends on who you mean when you say "someone" and what you do with the bitcoin.

Example:

You visit a web-based shopping site that accepts Bitcoin as payment.  As you visit, the website logs your IP address.  Then when you checkout the website generates a unique payment address for this purchase (and logs the payment address association with the IP address).

Now when you make the payment, those with access to the website logs can tell which addresses the outputs you spent came from.  If you are using the reference client (Bitcoin-Qt), then they now have a list of some of your bitcoin addresses.  They can then scan the blockchain for any other addresses that were previously used for inputs alongside any of these addresses giving them a larger list of your bitcoin addresses.

So yes "someone" can possibly link up your IP address and several (many?) of your Bitcoin Addresses.

So basically what you guys are saying, if I use a bank card to buy Bitcoins via TOR, have say 3 wallets for example all created and only ever used on TOR and say send the coins between each one, then that way you'll be un-traceable/harder to trace?

Which wallet services do you recommend I open? I've never tried opening one. Hardcore newbie.

Very helpful forum ;D

Mixing for newbies:
 - https://blockchain.info/wallet/send-anonymously

Of course, there are varying degrees of privacy.  Just like how Tor activity can be detected (seeing data go in on one side and seeing the same data go out on the other), this mixing doesn't magically protect from that same type of analysis.    But it does sever the direct link.

You need to provide a lot more information on what you are doing with the bitcoins and who you are trying to hide your activity from if you want a reliable answer.

Are you trying to hide the fact that you are using bitcoins from your bank? Then use cash to acquire the bitcoins and you'll be fine.  If you use any form of bank transfer (debit card, paper check, ACH transfer, wire, etc.) directly to an exchange then the bank will know you are using bitcoins.

Are you ok with the bank knowing that you are using bitcoin, but you don't want them to know what you are purchasing with the bitcoin?  Then don't need to do much of anything.  The bank will know that the money went to a bitcoin exchange, but they are unlikely to know what bitcoin address you are using.

Do you want to hide your purchases from the bitcoin exchange?  The exchange will be able to tell what Bitcoin Address you send your bitcoins to when they leave the exchange.  You'll need to look into ways to either acquire your bitcoins with an anonymous exchange, or find a way to bounce them and mix them enough to eliminate the trail before spending them.

Are you trying to hide illegal (or embarassing, or just personal) purchases from the government?  You'll want to make sure that the seller can't identify you either.

Anonymity depends on what your are doing, and who you are hiding from.

I didn't realise my question could mean so much lol lets say hide my purchases from the bitcoin exchange, so the bitcoin exchange can't find my house address.

The link someone kindly provided earlier appears to do that? If I'm understanding correctly..

https://blockchain.info/wallet/send-anonymously

Thanksss.

Yep. That should give you the anonymity you're looking for.  blockcahin.info will send coins from a different address then where you receive them.  If you move a really large or unique amount of coins a determined individual may still be able to tell ("Oh look, Mr. ManBearPig transferred exactly 10934.6523 BTC from our exchange to blockchain.info and then moments later blockchain.info transferred exactly 10934.6523 BTC to this well known internet based vendor, clearly Mr. ManBearPig just made a purchase from that well known vendor."), but for normal daily use amounts, your outgoing transaction will get lost in all the others.

Thank you very much, that sums up alot, I can send myself money through different wallets with that as a middle man sort of thing too can't I?
I'll probably try set up some wallets tomorrow to practice, is it best to use the same wallet company or different ones?
Which do you tend to use, you seem well educated in this sort of thing. Thanks.

Any type of direct electronic transfer should be easily identifiable.  If you don't want your bank to know how you spend your money, the best method is cash payments.  Sometimes this isn't possible if you're dealing with people in different countries. If that's the case your next best option would probably involve transfering funds through one or more intermediaries.

I simply use the Bitcoin-Qt reference client installed on my computer, without TOR.  I haven't engaged in any transactions where anonymity would be important to me.  I just happen to have some understanding of the concepts of bitcoin and anonymity as well as how the two relate to each other.

Not necessarily. It is possible to have an account with a prepaid card only with a random name attached to it.

Alternatively, find a homeless person and pay them a little to set up an account with their ID.

Thanks, which bit coin sellers accept cash/credit card? And once I put the money from card to bitcoin, if I wanted can I withdraw it into cash? How would one go about this? Cheers.

Nice idea, but a homeless guy won't be able to open a bank account, because he has no proof of residence.
Anonymous bank accounts are sold for approximately 1.000+ €, depending on some extras (e.g. telephone banking etc.)
I do not recommend to buy anonymous bank accounts, why the fuck did you want one?
I mean guys, seriously, we do have a market section here, buy your Bitcoin there, it's in my opinion the safest way.
And in addition you don't commit "crimes" (e.g. creating fake IDs etc. to open up a bank account).

Homeless guy can open a bank account but it may be problematic in some countries. Alternatively, it can be simply a destitute alcoholic or a drug addict who has someplace to live in.
As for the ''anononymous bank account'' it is only the cost of a prepaid card, about 3.7€.

Well, I don't think that banks in most Western European countries would give a homeless guy so easily a bank account, when they don't have a fuckload of documents etc.