Bitcoin Forum

Every time you give someone your public address to recieve coins, you are creating an association with your identity and a bitcoin address.

But if you ever spend those coins, you are creating bulletproof evidence that you were in control of those bitcoins all along. This means that it is basically impossible to create any kind of anonymous transaction. It also means that bitcoin is a terrible tool for tax evasion. It also means that it will be trivial to provide back-dated proof of cross-border currency movement.

The block-chain is going to become a treasure trove of evidence for putting people away for money laundering.

Also, the whole argument of "oh, you could just say you lost your private key".

Not true, since if you ever spend those coins, you are proving that you did in fact have the key, and lied about it.

That's why you create a new address for every transaction.
And what mixers are for.

Care to prove that mixers don't log connections between accounts?

Even if I have my Bitcoin address in my signature, you can't prove that I actually own it unless you hack into my computer.

No, Ripples are even less anonymous.

Anyhow, there are proposals to layer anonymity on top of bitcoin, for those who really need it. See:

https://en.bitcoin.it/wiki/Zerocoin

Linking someone's identity to their Bitcoin address is impossible if they took proper precautions. You don't need to provide any kind of identification to any authority to create a Bitcoin address. I'm going to have to disagree with the original poster.

If you read the actual Zerocoin paper, you realize how many fundamental changes it requires to the Bitcoin protocol/process. It's not a layer on top of Bitcoin so much as a fundamental rethinking about BTC semantics. And it only works when a large swath of miners actually use it (you can't just use Zerocoin on your own account and expect it to protect you). This will be a long, slow process.

http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf

Mixers can be compromised, how is this secure? Zerocoin seems to be the solution to this.

Strongly agree with the title.


True if you don't  spend any. Once you do - out goes your identity.

You've never been in court, I see. Legal 'proof' isn't held to the same level of rigor as in a mathematical theorem.

http://bitcoin.stackexchange.com/a/2782

No, the solution is Litecoins gentlemen. If you move your BTC into LTC, and then into USD or Euro or back to BTC with a new address, its totally untraceable.

Furthermore, you can buy Bitcoins for cash in person, and sell them for cash in person. Good luck tracing that.

https://localbitcoins.com/

Bitcoins are pseudonymous, and ease of tax evasion isn't really on the list of features and benefits, so who cares?

I imagine most BTC holders have every intention of paying taxes on realized gains, so they aren't going to be subjected to forensic examination.

For those looking to buy on Silk Road or move money across borders, you have to admit that it's trivial to buy and sell BTC without revealing your identity. A few precautions and it's really not going to be an issue for those determined to cover their tracks.

Doubtful. I think u just don't know how many traces r left.

I see not too many people understand what TOR is, who created it, why it was created, and how it can be used.

Privacy on the internet requires a bit of effort, but it is achievable. Any crypto currency can be completely anonymous if you understand how to conduct the transactions securely.

It may.  But I could participate in a perfectly legal transaction off the blockchain by sending somebody private keys to addresses with bitcoins loaded on them.  I could then delete those private keys so that I can no longer spend the coins associated with their addresses.  If those coins are then spent, by and by, on something illegal, is that proof that I spent them on something illegal?

http://media.tumblr.com/tumblr_m101xfl9Yx1r8kyx1.gif

In general, as a whole, bitcoin as it exists now is definitely anti-anonymous. There's not much that can be done about this without something like zerocoin or notes or receipts or some external abstraction.

People publish their addresses. Emails, true names, locations are associated with these. They transact with other people. These other people's identities are at risk.

Websites, exchanges, phone apps, personal computers, and other places that link identities to addresses will get hacked or subpoenaed. There are botnets, security and background checking companies that will make these associations for hire in the near future.

ISPs now monitor traffic for copyrighted content. Where does that lead to?

The NSA siphons every piece of data in this country into storage where it can be mined. This data has bitcoin addresses in it that will associate with at least an email address or a phone number. They will surely have teams of monkeys working round the clock on this, if not already.

Coin mixers currently require too much trust to be widely adopted. Besides, most people really don't give a shit about anonymity. This lessens the anonymity of the people who do, if they transact with them.

To make it anonymous for anybody, everybody has to be anonymous. That won't ever happen and it's too late for that anyway.

The connection of dots and loss of anonymity is a one way street. If you're careless once, those coins can always have an unerasable trail back to you and from you, in either direction.

How do you infer from a transaction being made from an address in a signature that the transaction actually was done by this person?!
If I would put there for example a MtGox address, it would be swiped but I'd never ever have owned the private key to it.

You will be only deanonymized for the address(es) that you use to pay a merchant from - and these can be from a mixing/proxy service.

I really hope this is implemented into Bitcoin at some point.

It is a wonderful idea, I bet Satoshi would have loved it.

Haha, idea!  Quick, everyone pick an address from the blockchain whose private key you do or don't own and post it in your sig.  Confuse OP.  

1PL8Xy3gb3GAuBCBjdMUoge67em6R7FXeL  <------ me?

12c6DSiU4Rq3P4ZxziKxzrL5LmMBrzjrJX

I'm gonna keep my eye on you.

Because I can mix them myself...

I can even frame others up by putting their address in my signature.

Now you see it? I am proudhon, all his coins are mine.

I have tried to get the attention of the more competent coders in the alt-coin forum to my suggestion of an address-free blockchain of Zero-coins, but it is hard to get anyones attention around there as the whole forum has been cluttered by get-rich clone coin schemes. Here it is, I would appreciate any comment to my suggestion:

https://bitcointalk.org/index.php?topic=202664.msg2135254#msg2135254

Aye. That could work. Until u r put in a jail for money laundering.

TOR won't help if u need to work with FIAT (aka buy and sell).

Could someone implement zerocoin into the client and set a date for release?

If enough people use it then the developers will take it on board as the new main client... Is the implementation of zerocoin difficult?

Has a testnet of zerocoin been considered?

Making Bitcoin truly anonymous would be the last hurdle.

I say this because if a alt coin is released with a full implementation of zerocoin or something similar, then its likely that will be attractive enough to beat Bitcoin. I personally can not see any alt being good enough to ever replace Bitcoin because of the network effect. But a fully anonymous coin would be so much more useful to the world that it would be one of the few things that destroyed Bitcoin.

I would prefer Bitcoin to have this functionality ASAP before a competitor built it.

I'm not sure that going completely anonymous is healthy for the society in general.
Would you like govt to use a system like ZeroCoin for their budget?

Bitcoin provides transparency for financial transactions where it is needed and allows for anonymity where it is desirable (with some effort).

Rather than hiding your transactions in a completely anonymous system because they are deemed "illegal", people of society should strive to change the definition of what's "legal" and tend to achieve this in an open and transparent way.

On the other hand, if technological feat is possible - man will do it. So we can imagine how systems like ZeroCoin might become a catalyst for changing our society's governing structure and reshaping its legal framework to prevent systems with complete anonymity from gaining momentum.

You do realize that Zerocoin requires more trust in a central authority than Bitcoin currently does? That alone will make it quite hard to be accepted into the bitcoin client. Also it probably requires a hard fork.

Feel free to play around with it on Testnet, but it is NOT a "just create some special transactions valid on current mainnet and you're magically anonymous" solution at all!

From my reading the trusted part was 1 option to get the zerocoin system started and afterwards no third party would ever be needed.

However I agree that any third party at any point in unacceptable.

They mentioned a option that the system can be started and usable with no third party, but the main thing against the system is the large transaction size.

If I buy goods from someone then that person knows that I own the address from which I am sending, but if he doesn't publish that information then nobody can know it is me.

Those who wish to remain anonymous will do so!