Bitcoin Forum

Why does Bitcoin not implement anonymous transactions feature? It would definitely be huge if it is implemented!

Also, if such features are not implemented what does BTC have apart from being the first and accepted by a large number of merchants? So why not implement the newest features from altcoins?

why don't u put a pull request

It would go against what BTC has come to be seen as...a transparent currency. Implementing anonymity features In the protocol(not 3rd party) would probably result in it's death imo.

If someone owns 51% he could do double spend attacks and destroy the integrity of the btc network.

If they would implement such feature, I am pretty sure government would have easily destroyed them by now. Just see what happened to liberty reserve.

Them? They?

Liberty Reserve was centralized, it was easy. Bitcoin would survive, but exchanges and mainstream adoption would suffer so it wouldn't be the best idea probably. It's best to have a separate cryptocurrency for true anonymity.

yes, I agree with you in that point, may be a separate cryptocurrency which has total anonymity.

And even if you want anon., there are several ways there for being anon. like mixing or converting to other altcoin.

There are so many nice to have features that you cannot possibly implement them all in Bitcoin without making it huge and unstable. I think it is to be considered as a huge benefit that the Bitcoin developer community does not try to jump on every bandwagon that comes along, but instead focuses on maintaining a stable core. There are promising altcoin projects which explore advancements on the cash-like properties of a cryptocurrency, though, and who knows, maybe some approach or another will be considered robust and useful enough to find its way into Bitcoin some day.

Of course not. Bitcoin's anonimity is fine as it is - more is not required.

Jeff

I think anon feature can be an add-on feature, does not need to be with the bitcoin core part.

for while it may not, but if bitcoin continues to grow. to at least maintain its present state, it will happen soon. but if not, the worst possible it will happen that bitcoin will disappear

Bitcoin does not connect addresses to names. But most Bitcoin users decide to sacrifice their anonymity for convenience because they want to buy Bitcoins on exchanges, which are usually regulated.

Coinjoin/similar schemes is supported by the protocol. I believe dark wallet and in the future others will have it enabled as default out of the box.

A research paper on coindesk recently stated that even with NO masking efforts they could only trace 10% of transactions by looking at the blockchain.

http://anonymity-in-bitcoin.blogspot.com/2011/07/bitcoin-is-not-anonymous.html

10% is wrong if you're talking about tracing 10% of transactions to output accounts like Coinbase, where the user sells his BTC for USD, it's much much higher, if you're talking about tracing regular Bitcoin transactions, it's 100%. Also coinjoin is deplorable, even having the slightest taint during mixing can reveal your tracks..Darkwallet is also centralized and being such, if it were to get hacked or anything like that, your funds could be stolen like any other malicious wallets out there..

Researchers were only looking at the blockchain.

Of course governments/exchanges would have more information as you say.

I don't know the details about darkwallet, better things will always come in the future given time.

Coinjoin/similar being deplorable.. I don't know about that, it can be done in a decentralized manor and if done correctly with enough sources and mixed enough times I think even the NSA would have only random guesses to go by.

http://www.coindesk.com/blockchains-sharedcoin-users-can-identified-says-security-expert/

http://bitcoin.stackexchange.com/questions/7966/what-are-tainted-coins-exactly

http://www.technologyreview.com/news/518816/mapping-the-bitcoin-economy-could-reveal-users-identities/

Coinjoin is not anonymous, the smallest bit of taint will unveil a user's transactions/tracks. Bitcoin is not anonymous in the least. Here are some website/articles on the subject, above.

Peter Todds comment on one of your linked articles.

Anyway protocol allows various tricks that was my point. Ulbricht was found via his name/gmail not TOR or Bitcoin.

It would be a political declaration of war at this time.

BTC is 100% anon if you use it right and with various utilities.

Dark is a joke, its not even anon. DRK is th enew FTC.

it went, FTC --->QRK---->DOGE---->Blackcoin---->DRK----???this is the dump cycle.

Anoncoin seems to be much better.

Bitcoin is not anonymous in the least. It's more open and transparent than Paypal.

Even if you tried to hide your tracks through mixing, there's a very high possibility that you would recieve tainted coins(your own coins sent back to you), and that would unveil your tracks....

Not to mention, as I type, there are people designing programs to follow every transaction a Bitcoin address has had and will make, that would obliterate any kind of privacy one can hope to attain through mixers..

how do people even know I own which coins in the first place....!

Any exchange you used know which coins you own. Any individual you do trades with know which coins you own, etc etc.

Using a crypto-currency designed to make tracing transactions impossible would likely break US money laundering laws.

Exactly like cash is illegal, and precious metals...

Fortunately all the cryptographic privacy systems can be transcript producing. Some of them inherently are, in the bytecoin/monero/fantomcoin system getting your single scanning private key lets the holder identify all your transactions... so it's very much audit-able, just not a free lunch for global passive surveillance and not a total privacy cluster-@#$@ for normal users.

So if one never used and exchange or never met anyone to buy btc, cash only deposits into a bank account, no ID. you are good to go.

There are plenty of ways to keep your identity secret and hide the source of the coins that you are spending.

The safest way to do this would be to use shared coin as this is a trustless way to "mix" your coins, however researchers have been able to track some transactions on the block chain that used this kind of "mixing"

You could also use a various number of mixing services (inputs.io, bitcoin fog) to mix your coins however you would need to trust the operators of these sites with your coins. The result would be a greater level of anonymity.

Cash transfers over a certain amount require reporting.

Ok answer this then: Person/address A, B and C have 1 BTC each.

They send this in a merged transaction to X, Y and Z.
You now have only 33% chance to guess who X is. Even if you send your own "tainted" coin to yourself in this merge it can not be proven.

33% won't hold in a court and as said before if everyone uses merging the chaos and anonymity adds up.


Money laundering - take a page from the Skype guys article:
You also use HTTPS when accessing your bank right? So auto merging coins is just an IT privacy protection/security feature!

You would only be doing money laundering if you are cooking your books and actually white washing money from criminal sources/avoiding tax.

I worded that wrong. It's true that if 3 people with the same amount of funds sent them in a mixer, it'd be impossible to find out what coins originally belonged to who.

I meant if a mixer wasn't be used enough(lack of people mixing their coins), and someone came to use it, there coins wouldnt be suffiently mixed, and they would recieve some of their own coins in return.

Also, if a person tries to mix a decent size amount of coins(50btc + or so depending on how many other people's coins that mixer already has), then they would relieve a large portion of their own coins back.

Finally, Mixers, Darkwallet, etc, are all 3rd party addons. Their owners could one day decide to scam everyone, and steal all the coins from the mixer, or steal all the coins from Darkwallet, which gives no options for trying to anonymize your bitcoins(tere's also besides meeting up with someone in real life and trying to sell to them, that also comes with extreme risks like getting robbed, severely injured, and arrested on attempt of money laundering if a cop sees someone handing you large amounts of money and that someone has no proof where the funds came from)

Why do they need to make bitcoin anonymous? If you want to use anon just use Vrc or something. But imo it's just a hype.

Bitcoin is getting very regulated. In NY for example, you(consumer) now have to have a license to even use buy Bitcoin. In France, merchants will have to tie a persons identity to an address for when that person makes payments..

As you can see plus tons of other regulations going out by other countries/states, Bitcoin is hardly private anymore.

Privacy is a real need, and concern. Anonymity/Privacy is not a hype, it's part of the fundamentals and is Greatly needed.

in fact bitcoin is already anonymous but services using it, are not using it good enough
to be able to provide 100% anoymity for their users/customers.
the thing is just that if bitcoin would be real anonymous (hidden transaction origin, amount destination, etc.)
that it wouldn't get established in real life economic as for the potential criminal aspect...

It's not presently anonymous.  However, it could be made to be so, which, if this were to occur, it seems based on some other discussions in this forum, that developers would prefer it to be an option, rather than something which would automatically apply in the case of all transactions.

See (and add your thoughts to) the following issue:

https://github.com/pmlaw/The-Bitcoin-Foundation-Legal-Repo/issues/19

If you believe that more emphasis should be given to funding basic bitcoin development, and also to anonymity projects, please check out this open issue, and leave your remarks on Github or here (and please share).

In addition you may be interested in the following bitcointalk threads where bitcoin developers have weighed in and given some preliminary thoughts:

1) https://bitcointalk.org/index.php?topic=699192.msg7900329#msg7900329

2) https://bitcointalk.org/index.php?topic=175156.msg7912447#msg7912447

Why would anon even be something you want if you want Bitcoin to be mass adopted?

wow. You're kidding right?  Can you suggest a _single_ widely adopted financial system in the history of the modern world which made everyone's transactions and 'balances' mandatorily public?

Imagine you collect a paycheck in Bitcoin— when you get a raise, do you want your landlord increasing your rent?  "I know you're good for it."

Imagine you resell a product you paid for in Bitcoin and hear from your customers "I know you paid less for it, I want a better price!" or from your suppliers "We want a bigger share, we know you're selling these items for top dollar.".

Do you want your competitors knowing what your sales figures are, what products you're selling, and to which customers you're selling them to?

Do you want your employer potentially questioning the causes you donate to?— or just the risk that they _might_ question them, forcing you to self censor your actions for fear of losing your job, "It's just not working out".

Should the barista at the coffee shop know your bitcoin-net-worth or your lack thereof? Or the mugger they pass the info off to know that you're the ideal person to kidnap? Should loan-sharks know when you're tight on funds and most likely to take a predatory loan or participate in some long shot investment gamble?

Should your in-laws know you're paying for contraception while they're clamoring for grandchildren, or what kind of porn you like?

Should people in your community know what you're paying for your child's education— funds you could be instead spending supporting the community garden?

Should bidders for a deal know what your prices were— undermining the inherent motivation to be honest in auctions which depends on keeping some information secret?

Good fences make good neighbors and financial transactions frequently reveal a bit about our most intimate secrets and values.  Being able to answer "it's none of your business" when it really isn't is what frees people from feeling they have to impose their values on everyone else and frees people from everyone else constantly imposing their values on them for all things.

Transparency is an essential tool in our social tool-belt too— but like all things it must be used in an intelligent and controlled manner. Sunlight can be a disinfectant but it can also cause skin-cancer.

In a world where massive power asymmetries exists having control over your private information is one of the few re-balancing forces which are theoretically available to everyone... and this applies in a multitude of business and personal contexts far more numerous than what I've listed here, sometimes in gross ways and sometimes subtle ways. In some sense a financial transaction underlies every interaction we make with another person— though sometimes the scarce assets exchanged don't include money— sometimes we trade with less formal systems like reputation, trust, future obligation, etc instead of or in addition to money... but such trades are always happening, and without some privacy in them we can have privacy in nothing. (Some people hope that Bitcoin, or Bitcoin inspired systems might help create formalized versions of some of these non-monetary value exchanges in the future too… hopefully not while also undermining their privacy.)

Used in a poor way (as some wallets have enshrined and some businesses seem to be promoting) Bitcoin is one of the least private transaction and value systems ever created. I'm hopeful for the human-welfare-enhancing possibilities that Bitcoin could create in the future, but if it goes a route that further erodes the privacy we have in our interpersonal interactions then it could instead fuel a terrible dystopia.

There are also some Bitcoin specific risks— In Bitcoin our goal is to build a system of exchange which minimizes the need for trust... but we still must trust miners to establish the ordering of transactions. As a result miners have a substantial power to censor, but privacy undermines that risk— so long as we have enough of it. Anything that creates an incentive to control mining— e.g. to achieve censorship goals— risks undermining the whole system, so we're all better off if the system is more private... even the non-existing hypothetical person that has no need for privacy.

So back to your question— I'd turn it around, if Bitcoin undermines people's privacy how could it possibly be adopted— are people that foolish? And if so, could free society survive the harm such an outcome would create?

Please read the bitcointalk threads below for a (more detailed) answer to your question.  The short answer is that anonymity as an eventual optional feature (e.g. something you could select for some transactions and choose not to use for others) appears to be favored by developers rather than the idea of mandatory application (which would apply anonymity to every transaction).  It is still a matter of much debate how anonymity could potentially be developed within the context of bitcoin.  Again, anonymity currently does not exist as part of bitcoin.

1) https://bitcointalk.org/index.php?topic=699192.msg7900329#msg7900329

2) https://bitcointalk.org/index.php?topic=175156.msg7912447#msg7912447

Exactly.  +9001 to gmaxwell.

I'm not sure what developers you're talking about— but anonymity loves company. Good privacy should be a default, if it can't be then it's probably to inefficient to give much improvement. Infrequently used privacy systems which are detectable risk raising suspicion and censorship for there mere use. (One of the attractions of CoinJoin and CoinSwap is that they're potentially indistinguishable from ordinary transactions)

Anonymity does love company. But to clarify, I was referring to this statement...


It would seem based on this and on similar things I've heard, that I might be able to conclude the following:

"if a user wants to participate in utilizing the Zerocash feature (assuming that this would be incorporated into and supported in the bitcoin protocol itself) then that should be an option that would be displayed in Bitcoin Core wallet.  (...) conceptually, the idea of having anonymous transactions as an option is appealing for a number of reasons.  (...) [(people could choose to make an obvious public record of what their donations are (or not! as it's a choice), and if they did, they could tally up their microdonations for deductions purposes at the end of the year (or not! if they chose anonymity in their transactions under (... http://abis.io )).]  Choice and consent should also be an objective of any process which offers something better (like anonymity) to the user.  And I think also the Foundation Board, dues-paying members, developers, and everyone can help anonymity happen with bitcoin while preserving that choice."

(( ref. https://bitcointalk.org/index.php?topic=175156.msg7912447#msg7912447 ))

Though the core code doesn't have anonymity, projects like Dark Wallet make it possible to spend Bitcoins anonymously.

Even anonymity as strong as Zerocash is not incompatible with strong public auditing of Bitcoin holdings; if anything it improves the auditing situation by making it easy to selectively choose who can audit your activities. I might be perfectly happy with my chosen accounting firm to see all my books in a provable way, maybe even my local government, while still wanting to ensure that criminals and competitors do not see my activities. With a bit of cleverness you can even make these audit proofs non-transferable - that is Alice could provide solid proof to Bob that she has the funds she claims too and her accounting books are correct, yet Bob would not be able to provide that proof to Mallory as either Alice or Bob could have produced it.

And yes, I agree 100% with gmaxwell's comments on the need for privacy. Bitcoin without privacy is simply a non-starter. In many jurisdictions failing to provide that basic level of privacy is even illegal in the context of many financial products, which will prove to be a serious barrier to Bitcoin adoption.

Except it isn't so atm, because Dark Wallet is not ready yet.  Dark Wallet is presently in alpha, v.0.5.0, still a ways to go.  
https://darkwallet.is/

Also, it should go without saying, that's a wallet project.  It will at least provide stealth and coinjoin as a natural part of any DW transaction, and will be used with Tor, but it currently doesn't offer what could properly be described as anonymity.

For that, a change to the bitcoin protocol (something like BRS (or alternatively zerocash in alt, then in bitcoin testnet)) would be needed, and imho, should appear as an option similar to how SharedCoin is presented as an option in blockchain's GUI.

Well this was always the hype of side chains wasn't it?

At the moment Monero offers proper anonymity via ring signatures and also has a view key that can be used to uncloak a user's transactions, but the user has to give up that key, it can't be derived from the blockchain.

So sidechains perhaps would allow Bitcoin to adopt the anonymous tech from Monero and implement it as a side chain into Bitcoin. Of course that goes against my interests as I am invested in Monero, but competition is good I guess. :)

Do you think people would feel less confident if Bitcoin changed characteristics like that? I wonder would this have a lasting impact on businesses deciding whether or not to accept it?

Well, the question would be if Bitcoin should be developed explicitly to match existing jurisdictions for financial products (if so, what jurisdiction), or if we should rather continue letting jurisdictions deciding themselves if they want to call Bitcoin a financial product (and if so, what kind of financial product).

Bitcoin has been adopted and has grown quite a bit even before considering if it can be considered as a financial product in jurisdiction X.