Being 100% anonymous with bitcoins

[Rampion]

I've been buying bitcoins with my paypal account through virwox, and then forwarding them from the Virwox account to a couple address of my two wallets (an eWallet and a local hosted wallet). If I understand the system correctly, these addresses could be linked to my identity as paypal has my credit card and personal details, and the bitcoins bought with it were transferred to those addresses. This would be a security breach, as if I receive a large amounts of bitcoins to those addresses, somebody could figure out my total balance and therefore be exposed to theft.

Here are my questions:

- if I generate new addresses in my wallet and send the funds received from Virwox there, would them be still easily trackable to myself? I assume the answer is YES from what I've read, but I really don't understand why.
- being the transactions public, what would be the best system to hide your total balance to avoid theft or confiscation from authorities?
- if I want to do a 100% anonymous payment from one of the addresses in my wallet (which I assume that are trackable to my identity), would be a mixing service like this one https://blockchain.info/es/wallet/send-anonymously do the job safely?

Thanks in advance.

[sounds]

- if I generate new addresses in my wallet and send the funds received from Virwox there, would them be still easily trackable to myself? I assume the answer is YES from what I've read, but I really don't understand why.

It is sometimes possible to figure it out, mostly if you send BTC from both wallets at the same time. (The bitcoin-qt client always does this.)

- being the transactions public, what would be the best system to hide your total balance to avoid theft or confiscation from authorities?

Get coins into several wallets without giving away that you are controlling all the wallets.

- if I want to do a 100% anonymous payment from one of the addresses in my wallet (which I assume that are trackable to my identity), would be a mixing service like this one https://blockchain.info/es/wallet/send-anonymously do the job safely?

I won't comment on blockchain.info's service.

Make sure you can actually pick which address on your local client.

[Rampion]

- if I generate new addresses in my wallet and send the funds received from Virwox there, would them be still easily trackable to myself? I assume the answer is YES from what I've read, but I really don't understand why.

It is sometimes possible to figure it out, mostly if you send BTC from both wallets at the same time. (The bitcoin-qt client always does this.)

What do you mean by "send BTC from both wallets at the same time"? Maybe you mean addresses?

- being the transactions public, what would be the best system to hide your total balance to avoid theft or confiscation from authorities?

Get coins into several wallets without giving away that you are controlling all the wallets.

- if I want to do a 100% anonymous payment from one of the addresses in my wallet (which I assume that are trackable to my identity), would be a mixing service like this one https://blockchain.info/es/wallet/send-anonymously do the job safely?

I won't comment on blockchain.info's service.

Make sure you can actually pick which address on your local client.

Sorry to insist, but maybe blockchain.info's service it's not secure or reliable? I see that I have to:

1) insert the address in which I want to receive the bitcoins
2) blockchain's service gives me an "anonymous" address to which send the bitcoins,
3) the bitcoins will be redirected "anonymously" to the address I specified at the beginning (point 1)

Anyhow, if I understand it correctly, if the address in which I receive the bitcoins is in the same wallet of other "exposed" addresses, I may be identified because when making transactions Bitcoin-Qt client will take the coins from my newly created address for anonymity purposes AND the exposed ones. I cannot choose which addresses send the bitcoins in bitcoin-qt client, is this correct?

[DannyHamilton]

Anyhow, if I understand it correctly, if the address in which I receive the bitcoins is in the same wallet of other "exposed" addresses, I may be identified because when making transactions Bitcoin-Qt client will take the coins from my newly created address for anonymity purposes AND the exposed ones. I cannot choose which addresses send the bitcoins in bitcoin-qt client, is this correct?

Correct.

[DannyHamilton]

. . . if I want to do a 100% anonymous payment from one of the addresses in my wallet (which I assume that are trackable to my identity), would be a mixing service . . . do the job safely?

While it can be difficult (if the mixing service is well designed) to absolutely prove that the value that comes out of a mixing service belongs to the same person as the the value that went in, forensic accounting can often result in a pretty convincing connection.

As an extremely simplified example imagine the following

Known user A sends 10 BTC to mixing service
Known user B sends 100 BTC to mixing service
Known user C sends 3 BTC to mixing service

The mixing service blends the 113 BTC together, splits and rejoins multiple times and bounces around several addresses.

Eventually the mixing service sends:
9 BTC to unknown user D
90 BTC to unknown user E
2.7 BTC to unknown user F

It would seem obvious that the 9 BTC belong to user A, the 90 BTC belong to user B, and the 2.7 BTC belong to user C.

[Rampion]

. . . if I want to do a 100% anonymous payment from one of the addresses in my wallet (which I assume that are trackable to my identity), would be a mixing service . . . do the job safely?

While it can be difficult (if the mixing service is well designed) to absolutely prove that the value that comes out of a mixing service belongs to the same person as the the value that went in, forensic accounting can often result in a pretty convincing connection.

Thanks for the detailed and clear explanation. What would you suggest as the best way to manage your balance anonymously? The best solution I can think of:

For new funds:

- running Bitcoin-Qt (or an ewallet) through Tor
- buying bitcoins with ukash or similar anonymous cash-like service (also through tor, or directly to a person I know) and sending the funds to the Tor managed wallet

For already existing funds:

- sending the bitcoins to a wallet (or ewallet) accessed only with Tor, through a mixing service (which is not perfect, but should help)

Next step for me would be to learn to use Bitcoin-qt through Tor. I assume that if I do that I wouldn't be helping to the stability of the network, is this correct?