How to create truly anonymous bitcoins in 5 easy steps

[Vladimir]

How to create really anonymous bitcoins.

1. get a bunch of identical USB sticks with an encrypted persistent live linux distro, bitcoind, bitcoin GUI, pushpool
2. start one such stick, point some decent mining capacity to it
3. once you solve a block, shutdown the OS/stick and store the stick and corresponding password separately (backup strategy is your responsibility)
4. if you have more USB sticks goto 2
5. use virgin money stored on such USB sticks for truly anonymous transactions or trade the physical sticks themselves

Edits:

 - Buyer of a physical bitcoin stick shall protect himself from doublespend ASAP by transferring money out or need to trust seller

 - Having Tor by default for bitcoin here is a good idea, credit to kokjo

[Jaime Frontero]

i haz those...

[SmokeTooMuch]

Will there ever be an option to choose which coins to spend in the original client ?

[eturnerx]

OP: +1

[da2ce7]

except that USB flash-drives have a data half-life of between 2 and 10 years... (depending on the quality/type of flash chips used).

[kokjo]

How to create really anonymous bitcoins.

if you wants more anonymity install tor too, and make it the default proxy for bitcoin.

[Jaime Frontero]

except that USB flash-drives have a data half-life of between 2 and 10 years... (depending on the quality/type of flash chips used).

yes.  i'm looking into that.

my USBs are not quite like vladimir's - truecrypt partitions with an external copy of the program for each OS - but that's not really the issue.

R/W CD/DVDs aren't any better, in terms of reliable longevity.  and magnetic tape is awesome as a rotated back-up media:  it's gotta be utterly bulletproof for... what?  six months?

fully encrypted RAID systems made out of notebook HDDs are probably the best option.  but they're not pocketable, or (and while definitions vary, the point is valid) particularly clandestine.

generational back-ups are a bitch, aren't they?

[da2ce7]

I have been thinking about this a bit... The best way to securely store bitcoin is to create a special bitcoin client that accepts 'seed data' when making the initial keys.

What happens is the client first generates a 1024 bit number that is used as for the 'seed data' for the creation of all the secret keys in the future.

This user prints out this seed data file on acid free paper... and stores in a secure location? A fire safe maybe.

The Bitcoins are either generated, or sent to some of the keys made from the seed data.... once those transactions have been completed... All the data is deleted, Including the bitcoin keys.

When the user wants to spend the data... He scans in the seed data into the computer... re-generates all the bitcoin private keys (say the first 1000 keys) .  Then, rescans the block-chain for any transactions.


This same concept could be used for a more secure version bitbill... as a small code on the inside could represent as many private keys as owner wanted.  (some private keys could need the seed data + an extra password to create)...  However there would be no way of knowing.  The user could have a 'card balance' (on the first key generated) and a secret balance that can only be found by entering a passphase.

[trentzb]

I am not getting how this would be truly anonymous. Granted I have only one cup of coffee in me this morning so far, but you have to announce your solved block to the network, didn't you just lose anonymity?

[Vladimir]

I am not getting how this would be truly anonymous. Granted I have only one cup of coffee in me this morning so far, but you have to announce your solved block to the network, didn't you just lose anonymity?

It once block is solved the block reward is give to a new bitcoin address and there is no history for this particular coin and therefore no amount of datamining will reveal your identity. Tor here helps to hide your IP and as such this is as anonymous as it gets.

[da2ce7]

A mixing service that uses Blinded Tokens would also provide real anonymity.

[trentzb]

I am not getting how this would be truly anonymous. Granted I have only one cup of coffee in me this morning so far, but you have to announce your solved block to the network, didn't you just lose anonymity?

It once block is solved the block reward is give to a new bitcoin address and there is no history for this particular coin and therefore no amount of datamining will reveal your identity. Tor here helps to hide your IP and as such this is as anonymous as it gets.

Gotcha, that makes sense now and I concur, this seems to be about as good as it can get.

[Riley]

Do you really want to be the seller of these sticks, though? The only guy who could know anything about the identity of a bunch of people who really don't want anyone to know anything about their identity?

Does it make sense to make the image for these sticks publicly available on the net (anonymously), let the baddies make their own, have them tell you their IP address, and then point your mining power at that IP?

Then you never have to know their bitcoin address.  But maybe you could still find the generated coin? I don't really know how pools work.

[fergalish]

Will there ever be an option to choose which coins to spend in the original client ?

*this* would be great.