Tracking owners via localBitcoins for targeting at a later date. Be Safe??

[crazy_rabbit]

This just occurred to me when thinking to use LocalBitcoins.

Lets say someone is looking for a target to either con, extort or just outright rob. They go on LocalBitcoins and find people willing to trade large amounts of BTC. They make a small initial trade followed up by several other small trades. They do this with multiple different individuals.

They look at the block chain to see the balance of the addresses sending them the money. By doing multiple trades they can look farther up the blockchain to see if the transfers come from the same place. If that 'same place' has a high balance, they've found a potential target for con, extortion or theft.

Likewise the government could also set a person up for a sting like this.

It's tricky because unless you use some sort of service of obscure the origins of the payments, it's not so difficult to determine if the person you are dealing with has a lot of money or a little bit of money. When knowing this person in real life, it makes a convenient way to spot real life high value individuals.

All the more reason to use mixing services, although supposedly only a few services do it well enough to be effective.

What are other peoples thoughts on this?

[rebuilder]

Localbitcoins offers an escrow service, which should act as a mixer as well, right?

[joecascio]

If when trading bitcoin the localbitcoin trader uses a different address for each transaction, wouldn't that go at least some way toward making it difficult to track his total balances?

The related question of outright robbery has been on my mind, though. If you are trading bitcoin in any substantial amounts through localbitcoin it means that either before or after the transaction, you will be carrying a large amount of cash.

I thought about performing the transaction right outside the bank branch in my local supermarket. That way, I can withdraw or deposit the cash at the same time and place as the transaction occurs, so I reduce the chance that some thief will try to rob me of cash either before or after the transaction.

[crazy_rabbit]

If when trading bitcoin the localbitcoin trader uses a different address for each transaction, wouldn't that go at least some way toward making it difficult to track his total balances?

The related question of outright robbery has been on my mind, though. If you are trading bitcoin in any substantial amounts through localbitcoin it means that either before or after the transaction, you will be carrying a large amount of cash.

I thought about performing the transaction right outside the bank branch in my local supermarket. That way, I can withdraw or deposit the cash at the same time and place as the transaction occurs, so I reduce the chance that some thief will try to rob me of cash either before or after the transaction.

I was thinking more so of people figuring out who you are and what your wealth might be via tracking the money flow down the addresses you spend with. Even if you use a new address each time, you still need to deposit on that address from another address- something that is rather trivial to track.

[Serith]

I was thinking more so of people figuring out who you are and what your wealth might be via tracking the money flow down the addresses you spend with. Even if you use a new address each time, you still need to deposit on that address from another address- something that is rather trivial to track.

For this case MtGox is sufficient to mix the coins, but the knowledge about someone's financials makes that person vulnerable, and what you pointed is only one potential issue, that's why I advocate so hard for Automatic Coin Mixing Idea, P2P coin mixing

All you need to do is send your bitcoins to MtGox and withdraw them to a new address. MtGox processes so many bitcoin deposits and withdrawals that you've very unlikely to get the same coins back, and so nobody (other than MtGox and anyone with access to their database) would be able to tie your deposit together with your withdrawal. Alternatively, make 2 MtGox accounts, deposit into one, use a 'redeemable code' to transfer the coins to the other account, and withdraw from there. Then even MtGox can't be sure the coins didn't change hands.

P.S. Why the thread was moved to Trading Discussion?

[MPOE-PR]

Suppose you always send BTC from gox/blockchain wallet. Problem solved.

[kangasbros]

One reason I originally created easywallet.org because the privacy model of the other mobile wallets were really bad - they all used only one address, so anyone who you did business with knew all your transactions. I wanted to use multiple addresses, and have built-in mixer. Currently the multiple address -feature is by default off, since it was very confusing for newbies, you have to turn it on via the preferences.

[Stephen Gornick]

you have to turn it on via the preferences.

Or, to match the terms used by EasyWallet, you need to turn off the "Use Static Address" option under Settings.