Anonymous networks and Bitcoin

[Daily Anarchist]

Can somebody explain to me if Bitcoin can work well with i2p? Can Bitcoin ever become fully anonymous? If I have a website on i2p, and I post a bitcoin donation address, is it possible to keep myself anonymous? Wouldn't the simple act of opening up my wallet to receive those Bitcoins be a dead giveaway that the website of the address belongs to me?

I know there's a way to use Tor with Bitcoin, even though I don't do it or know how to. But what about i2p?

How can we get the dark net and Bitcoin to compliment each other? Would it just take creating an i2p bitcoin client? Or would it take a whole new i2p/bitcoin blockchain?

[julz]

The bitcoins are under the control of your private key once the transaction has had some confirmations - it's not dependent on when you open your wallet.

Just opening your wallet and syncing so that you see your balance is not going to reveal anything to anyone about what private keys (and corresponding public addresses) the wallet holds.
(Assuming you're using a full Bitcoin client and not some hosted or hybrid wallet system)
Only when you spend it will there be the theoretical risk of peers on the network seeing your IP address as the source. (though even then - they probably don't know you weren't just relaying the transaction)

The spending action is the main one where you have to worry about identity linkage occurring - mostly through what shows in the blockchain, but potentially also through IP address if you are worried about the peers you connect to or the network you're on.

[niko]

Only when you spend it will there be the theoretical risk of peers on the network seeing your IP address as the source. (though even then - they probably don't know you weren't just relaying the transaction)

The spending action is the main one where you have to worry about identity linkage occurring - mostly through what shows in the blockchain, but potentially also through IP address if you are worried about the peers you connect to or the network you're on.

Note that in case of a flood of adversary nodes connecting to your node, your IP can be associated with the spend with some probability, not with certainty. There is still the plausible deniability. It would take your ISP or a compromized router firmware to monitor ALL of your conections.

[gabbergabe]

You can already see every transaction so my only guess is along with what was stated above, never ever talk online or to anyone. People can easily tell who i am from my address. You can tell from blockchain i earn btc from cointube. and have recieved an 8 coin payment and sent the same amout as well just by looking at it.

right?

[BkkCoins]

You can already see every transaction so my only guess is along with what was stated above, never ever talk online or to anyone. People can easily tell who i am from my address. You can tell from blockchain i earn btc from cointube. and have recieved an 8 coin payment and sent the same amout as well just by looking at it.

right?

Why on earth would you use the same address as your cointube one? You do know you can have as many addresses and/or wallets as you like.

right?

But hey! Not telling everyone you own the address would be a good idea if you want to stay anonymous.

If you're really serious I'd recommend not using a home connection either. Use a public wifi and connect via proxy, ssh or vpn (not one you paid for with a cc). Do your spends offline with a raw tx and push them via blockchain.info thru the mixer.

(aside - here >80% of wifi home connections are open - not even using WEP, and there is citywide free wifi anyway)

[marcus_of_augustus]

Bitcoin is basically a big honey-pot, tailor-made for law enforcement data-mining and linking financial transactions with IP addresses.

You have to be very, very careful to not leak identifying information, before it can be used anonymously. In fact, it is such a PITA that I'd say it is useless to 99% of users as an anonymous transfer mechanism since most internet users have no idea how much they are actually leaking.

But the myth, aka perception, of anonymity seems to be more important to most users than the reality so the party rolls on .... for now.

[kangasbros]

Bitcoin is basically a big honey-pot, tailor-made for law enforcement data-mining and linking financial transactions with IP addresses.

You have to be very, very careful to not leak identifying information, before it can be used anonymously. In fact, it is such a PITA that I'd say it is useless to 99% of users as an anonymous transfer mechanism since most internet users have no idea how much they are actually leaking.

But the myth, aka perception, of anonymity seems to be more important to most users than the reality so the party rolls on .... for now.

Anonymity is not a boolean variable. It is level of uncertanity related to some event, can be very high or very low (we have strong confidence that the person who transfered the bitcoin is person X).

[niko]

Bitcoin is basically a big honey-pot, tailor-made for law enforcement data-mining and linking financial transactions with IP addresses.

You have to be very, very careful to not leak identifying information, before it can be used anonymously. In fact, it is such a PITA that I'd say it is useless to 99% of users as an anonymous transfer mechanism since most internet users have no idea how much they are actually leaking.

But the myth, aka perception, of anonymity seems to be more important to most users than the reality so the party rolls on .... for now.

Even if your spectacular statements were true (one of them is close), I am still better off with Bitcoin than I am with credit cards. It's faster, cheaper, and easier with Bitcoin. Furthermore, things czn be turned around, and we could argue that publicly accessible ledger offers the possibility for the public to audit government and corporate spending. The way things are now, without btc, is that there is no transparency between the government/corporate establishment and the people, but a one-way mirror. Bitcoin could make things fair and balanced.

[tcp_rst]

Bitcoin is basically a big honey-pot, tailor-made for law enforcement data-mining and linking financial transactions with IP addresses.

You have to be very, very careful to not leak identifying information, before it can be used anonymously. In fact, it is such a PITA that I'd say it is useless to 99% of users as an anonymous transfer mechanism since most internet users have no idea how much they are actually leaking.

But the myth, aka perception, of anonymity seems to be more important to most users than the reality so the party rolls on .... for now.

Anonymity is not a boolean variable. It is level of uncertanity related to some event, can be very high or very low (we have strong confidence that the person who transfered the bitcoin is person X).

Yes!  It's important to define what you mean by "anonymous". Lot's of shades of grey here.  True anonymity is quite difficult to achieve. Ultimately, who it is that you are trying to keep the information from matters significantly in regards to the amount of effort it will take to achieve.  Keeping information from one's neighbor requires significantly less effort than keeping information from state intelligence agencies, for example.

[JoelKatz]

Can somebody explain to me if Bitcoin can work well with i2p? Can Bitcoin ever become fully anonymous? If I have a website on i2p, and I post a bitcoin donation address, is it possible to keep myself anonymous? Wouldn't the simple act of opening up my wallet to receive those Bitcoins be a dead giveaway that the website of the address belongs to me?

Opening your wallet doesn't receive bitcoins. Receiving bitcoins is entirely passive. Action is only needed to send them.

I know there's a way to use Tor with Bitcoin, even though I don't do it or know how to. But what about i2p?

How can we get the dark net and Bitcoin to compliment each other? Would it just take creating an i2p bitcoin client? Or would it take a whole new i2p/bitcoin blockchain?

Use a separate wallet with a separate address. The only time you put your identity at risk is when you spend the bitcoins. Then you have two issues:

1) You have to submit the transaction without revealing an IP address that can be traced to you. You can submit the transactions through i2p or tor or from a store's open wifi. (Which might reveal your approximate geographic location depending on how you do it.)

2) You reveal to the world the bitcoin address you sent the bitcoins to. So obviously, you don't want to send it to an account associated with you. People will be able to see which accounts you send the bitcoins to.

[DannyHamilton]

From my reply: "Use a separate wallet with a separate address." As I said, all the bitcoin addresses you send money to from that wallet can be associated.

Oops, must've jumped straight to points 1 & 2 and somehow skipped over the part where you said that.  Sorry.

Bah, my whole post was poorly thought out.  Deleting it...

[n8rwJeTt8TrrLKPa55eU]

But the myth, aka perception, of anonymity seems to be more important to most users than the reality so the party rolls on .... for now.

This is 100% true.  Optimistically though, over time as BTC usage grows, there will be evolution, awareness, and workarounds to the privacy problems, similar to what has happened with cookie management in the browser.  In the same way that the first virus had to exist in order to justify development of antivirus products, I'd expect mixing clients and mixing services to really start flourishing once business intelligence companies develop and start publicizing sophisticated blockchain analysis tools.  People will demand privacy features once they start seeing demos of their wallet history and spending patterns being tracked and reverse engineered by people they've sent money to.

[niko]

But the myth, aka perception, of anonymity seems to be more important to most users than the reality so the party rolls on .... for now.

This is 100% true.  Optimistically though, over time as BTC usage grows, there will be evolution, awareness, and workarounds to the privacy problems, similar to what has happened with cookie management in the browser.  In the same way that the first virus had to exist in order to justify development of antivirus products, I'd expect mixing clients and mixing services to really start flourishing once business intelligence companies develop and start publicizing sophisticated blockchain analysis tools.  People will demand privacy features once they start seeing demos of their wallet history and spending patterns being tracked and reverse engineered by people they've sent money to.

Again, most people don't give a damn. Such analyses are commonly done with today's credit cards, and vast majority uses them, without any mixing or similar services.

[Largo]

You dont really want to use I2P with bitcoin, since you would have to use an outproxy to the internet or find I2P bitcoin nodes which could get hard to configure in both cases.

With TOR it works without problems tho, you can even connect to TOR hidden service bitcoin nodes through the addnode command, which isnt even needed since you can connect to any bitcoin node through TOR.
Just configure Bitcoin to use localhost:9050 as proxy when TOR is running and everything goes through TOR.

Then make multiple Bitcoin wallets (just make different shortcuts with different -datadir= commandline options to bitcoin.exe), one for your real identity, one for buying on silkroad, one for selling on silkroad, and so on, and never send coins from one wallet to another.

Its not that hard to use Bitcoin anonymously  

EDIT:
And if you need to send bitcoins from for example your real identity wallet to your silkroad buyers wallet, use a mixing service and/or 1-2 large shared web wallets to make the transaction from one wallet to the otherone untracable.

[n8rwJeTt8TrrLKPa55eU]

Such analyses are commonly done with today's credit cards, and vast majority uses them, without any mixing or similar services.

Not comparable in terms of scope.  If I buy something with a credit card on Amazon, they don't have access to my entire transaction history on that credit card, or to my current bank balance.   Not so, in the worst case, with BTC, where if address reuse and identity leakage occurs, payees can potentially see all past transactions and contents of current wallet.
 

Again, most people don't give a damn.

Level of outrage is a function of expectations versus reality.

The potential disillusionment with BTC leakage will be much worse than with credit cards.  People understand that the credit card provider has access to all transactions on their card, they see that in every monthly statement, it's obvious.  The expectation for privacy is low, and the worst case risk (your data gets stolen or subpoena'd, or your wife might discover the gifts that you've been buying for your mistress) is implicitly understood.  So when leaks occur, or data is mishandled, the results are not totally unexpected.

Not so with BTC.  People will be much more upset with BTC privacy leakage because the currency has been marketed as pseudonymous, and the leakage vectors are not at all apparent unless you're tech-savy.  The comparison and expectation wrt. BTC will be similar to cash, not to credit cards.  Very few non-techies will understand the consequences of sending BTC that ties one of their addresses to an identity, or the consequences of reusing or publishing wallet addresses.  Hence when BTC privacy leaks start getting publicized, I predict that there will be much more outrage and "damn-giving" than what you've seen for any cases of credit card leakage.

[julz]

ok.. so opening your wallet will not risk revealing what addresses you have.. *once this weakness is fixed* https://bitcointalk.org/index.php?topic=135856.0

[DannyHamilton]

ok.. so opening your wallet will not risk revealing what addresses you have.. *once this weakness is fixed* https://bitcointalk.org/index.php?topic=135856.0

Interesting attack.  Sounds like there are 2 ways to protect against it. You can use TOR so your addresses can only be associated with the TOR exit node, or you can run a second copy of bitcoind without any addresses and make sure that your first wallet only connects to this second one.