Basic Question About Changing Addresses Every Transaction

[hoganJ32888]

Hey,

So when you send money from blockchain to circle, I should get a new circle (receiver) address for every transaction right

However, do you also need to change my blockchain (sender) address?

Or do I just send from the same address every time, or do they automatically change it for me? Not sure how this works.


I just don't want to perform any action that will make someone more easily be able to hack me.

[shorena]

Hey,

So when you send money from blockchain to circle, I should get a new circle (receiver) address for every transaction right

No, circle is an account not a wallet. There is no reason to request a new deposit address.

However, do you also need to change my blockchain (sender) address?

Thats not possible.

Or do I just send from the same address every time, or do they automatically change it for me? Not sure how this works.

Technically there is no "from" address. Blockchain explorers and wallets show it that way to make it easier for us. Whenever you create a transaction it used previously received inputs. Essentially old transactions. These old transactions have been received on a certain address. This address is put into the "from" part whenever there is need for one. To be technically correct it should show the transaction itself. Anyway. That is the reason why you can never change the "from" address. Its always the one you have received the coins with. If you have a wallet (not using a service like circle). It makes sense to hand out a new address every time to expect a transaction.

Why? Mainly for two reasons.

#1 It makes it harder for someone to know how much bitcoin you have. If you give out a fresh address every time, the address will show no previously received coins. Thus the person does not know how much you received in the past. Due to the way most service work it does not apply there. Mainly because while you have a deposit address, the coins received there are used for other users payout. Thus it might be possible to know how much coins you ever deposited to a service, but not how many coins you currently have. This is also only possible if you let people know your deposit address, which should not be a regular thing.

#2 It makes it easier to track from whom you have received coins. If you label your addresses accordingly (e.g. "full node donations - 1...", "load to user xyz - 1...", etc.) you never have to guess why someone send you coins or where they got your address from. Think of an address not like your bank account number, but like an invoice id. It helps you keeping track.

I just don't want to perform any action that will make someone more easily be able to hack me.

None of this has anything to do with security[1], if anything it is about privacy.


[1] Besides some possible highly unlikely future scenarios where bitcoin itself is in danger due to several algorithms beeing broken.

[unholycactus]

Having multiple addresses does increase security, as opposed to what has been said above.
If you lose a private key or someone maliciously takes control of it and your coins are spread across multiple addresses, you won't lose as much.

As for this

I just don't want to perform any action that will make someone more easily be able to hack me.

You should never store your coins on an online wallet. Use a wallet where you control the private keys.
Circle and Blockchain could just take your funds away and you wouldn't be able to do anything about it.

[notlist3d]

Having multiple addresses does increase security, as opposed to what has been said above.
If you lose a private key or someone maliciously takes control of it and your coins are spread across multiple addresses, you won't lose as much.

As for this

I just don't want to perform any action that will make someone more easily be able to hack me.

You should never store your coins on an online wallet. Use a wallet where you control the private keys.
Circle and Blockchain could just take your funds away and you wouldn't be able to do anything about it.

Also not storing them all in same place increases security.   If you have a good amount of addresses but store them all in one place you could loose them all.   So keep storage in mind.  Cold storage is only as safe as your storage method.

Unless were talking about like a bank safty deposit box.  Then I could see one place having more then average security.

[gentlemand]

Circle and Blockchain could just take your funds away and you wouldn't be able to do anything about it.

Blockchain.info never handles your private keys. The weak link in its security will always be the user themselves which is why I stopped storing coins there myself.

[shorena]

Having multiple addresses does increase security, as opposed to what has been said above.
If you lose a private key or someone maliciously takes control of it and your coins are spread across multiple addresses, you won't lose as much.
-snip-

I would argue that this is not actually the case for the majority of users. Most have a single wallet or use a single service. If one private key is compromised all are.


Edit: typo

[ranochigo]

Circle and Blockchain could just take your funds away and you wouldn't be able to do anything about it.

Blockchain.info never handles your private keys. The weak link in its security will always be the user themselves which is why I stopped storing coins there myself.

Blockchain.info handles your encrypted private key. There was a reputable person saying that the source code indicates that the encrypted private key is downloaded to the user and they never handle the unencrypted one. However, the main problem is that, they can easily capture your password to unlock the private key by inserting a malicious script. Using a centralised service also expose yourself to potential doublespending attacks by the wallet providers.

[Ceizer54]

Man its upto you if you want to change your address or not...But receiving bitcoins on new address everytime increases the security and anonymity of your account...Eitherway you are able to send and receive bitcoins

[neonshium]

Man its upto you if you want to change your address or not...But receiving bitcoins on new address everytime increases the security and anonymity of your account...Eitherway you are able to send and receive bitcoins

Yes for the Security purpose the core versions are suggesting to use new address to receive any new payments. So, it would be a nice idea for not hoarding all your coins in a single address, which would save you from a hacker as well as from tax kind of problem if any occur in future.

[ranochigo]

Man its upto you if you want to change your address or not...But receiving bitcoins on new address everytime increases the security and anonymity of your account...Eitherway you are able to send and receive bitcoins

Yes for the Security purpose the core versions are suggesting to use new address to receive any new payments. So, it would be a nice idea for not hoarding all your coins in a single address, which would save you from a hacker as well as from tax kind of problem if any occur in future.

It is actually mostly for anonymity. There isn't a definite way to tell whether the new address belongs to the sender, the best way to maintain anonymity is still mixers. Security wise, the security isn't going to be increased tremendously. Change address are mostly used for preventing hackers from compromising your account due to weak RNG when generating a transaction. By using a new address everytime, the chances is decreased unless the private key itself is not random. Using change address or not, malware can still steal your Bitcoins.

[odolvlobo]

A Bitcoin address is not intended to represent a person or an account. It is better to think of it as a kind of "payment code". If someone wants to send you bitcoins, you give them a payment code (a.k.a. Bitcoin address) to send to. The private key is what enables you to use the bitcoins that have been sent to that address.

Your wallet keeps track of all the addresses. You don't have to think about them.

Blockchain.info unfortunately perpetuates the poor practice of reusing addresses by giving you a "default" address and saying that it is "your" address. I bet they are the only wallet that still does this.

Blockchain.info is capable of providing as many addresses as you need, but they don't make it easy. If you want a new address, go to the "Receive Money" tab and click on "New Address".

[CanIHazBitcoin777]

Circle and Blockchain could just take your funds away and you wouldn't be able to do anything about it.

Blockchain.info never handles your private keys. The weak link in its security will always be the user themselves which is why I stopped storing coins there myself.

I dont understand what you say. You say they dont handle the private keys,then why arent they trustful? I hold my coins there and never got robbed.

[ranochigo]

Circle and Blockchain could just take your funds away and you wouldn't be able to do anything about it.

Blockchain.info never handles your private keys. The weak link in its security will always be the user themselves which is why I stopped storing coins there myself.

I dont understand what you say. You say they dont handle the private keys,then why arent they trustful? I hold my coins there and never got robbed.

The user may have weak passwords or the user may unknowingly installed malware on his computer. Anyhow, even if the user creates strong password and uses 2FA, I wouldn't trust them. The main reason being that they have poor security practices that has caused users to lose hundreds of Bitcoins. Mostly they are involving RNG which affects the randomness of the private key.

[odolvlobo]

Circle and Blockchain could just take your funds away and you wouldn't be able to do anything about it.

Blockchain.info never handles your private keys. The weak link in its security will always be the user themselves which is why I stopped storing coins there myself.

I dont understand what you say. You say they dont handle the private keys,then why arent they trustful? I hold my coins there and never got robbed.

Accessing your bitcoins through a website makes you more vulnerable than holding your bitcoins locally. Phishing and keyloggers are the major threats.