Bitcoins are the LEAST anonymous currency ever created

[totaleclipseofthebank]

Every time you give someone your public address to recieve coins, you are creating an association with your identity and a bitcoin address.

But if you ever spend those coins, you are creating bulletproof evidence that you were in control of those bitcoins all along. This means that it is basically impossible to create any kind of anonymous transaction. It also means that bitcoin is a terrible tool for tax evasion. It also means that it will be trivial to provide back-dated proof of cross-border currency movement.

The block-chain is going to become a treasure trove of evidence for putting people away for money laundering.

Also, the whole argument of "oh, you could just say you lost your private key".

Not true, since if you ever spend those coins, you are proving that you did in fact have the key, and lied about it.

[mustyoshi]

That's why you create a new address for every transaction.
And what mixers are for.

[Come-from-Beyond]

That's why you create a new address for every transaction.
And what mixers are for.

Care to prove that mixers don't log connections between accounts?

[R2D221]

Even if I have my Bitcoin address in my signature, you can't prove that I actually own it unless you hack into my computer.

[Timo Y]

No, Ripples are even less anonymous.

Anyhow, there are proposals to layer anonymity on top of bitcoin, for those who really need it. See:

https://en.bitcoin.it/wiki/Zerocoin

[mwag]

Linking someone's identity to their Bitcoin address is impossible if they took proper precautions. You don't need to provide any kind of identification to any authority to create a Bitcoin address. I'm going to have to disagree with the original poster.

[ihsotas]

No, Ripples are even less anonymous.

Anyhow, there are proposals to layer anonymity on top of bitcoin, for those who really need it. See:

https://en.bitcoin.it/wiki/Zerocoin

If you read the actual Zerocoin paper, you realize how many fundamental changes it requires to the Bitcoin protocol/process. It's not a layer on top of Bitcoin so much as a fundamental rethinking about BTC semantics. And it only works when a large swath of miners actually use it (you can't just use Zerocoin on your own account and expect it to protect you). This will be a long, slow process.

http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf

[Stampbit]

Mixers can be compromised, how is this secure? Zerocoin seems to be the solution to this.

[nebulus]

Strongly agree with the title.

Even if I have my Bitcoin address in my signature, you can't prove that I actually own it unless you hack into my computer.

True if you don't  spend any. Once you do - out goes your identity.

[ihsotas]

Even if I have my Bitcoin address in my signature, you can't prove that I actually own it unless you hack into my computer.

You've never been in court, I see. Legal 'proof' isn't held to the same level of rigor as in a mathematical theorem.

[fellowtraveler]

That's why you create a new address for every transaction.
And what mixers are for.

Care to prove that mixers don't log connections between accounts?

http://bitcoin.stackexchange.com/a/2782

[cdog]

No, the solution is Litecoins gentlemen. If you move your BTC into LTC, and then into USD or Euro or back to BTC with a new address, its totally untraceable.

Furthermore, you can buy Bitcoins for cash in person, and sell them for cash in person. Good luck tracing that.

https://localbitcoins.com/

[Pale Phoenix]

Bitcoins are pseudonymous, and ease of tax evasion isn't really on the list of features and benefits, so who cares?

I imagine most BTC holders have every intention of paying taxes on realized gains, so they aren't going to be subjected to forensic examination.

For those looking to buy on Silk Road or move money across borders, you have to admit that it's trivial to buy and sell BTC without revealing your identity. A few precautions and it's really not going to be an issue for those determined to cover their tracks.

[Come-from-Beyond]

For those looking to buy on Silk Road or move money across borders, you have to admit that it's trivial to buy and sell BTC without revealing your identity.

Doubtful. I think u just don't know how many traces r left.

[User_513]

I see not too many people understand what TOR is, who created it, why it was created, and how it can be used.

Privacy on the internet requires a bit of effort, but it is achievable. Any crypto currency can be completely anonymous if you understand how to conduct the transactions securely.

[proudhon]

Every time you give someone your public address to recieve coins, you are creating an association with your identity and a bitcoin address.

But if you ever spend those coins, you are creating bulletproof evidence that you were in control of those bitcoins all along. This means that it is basically impossible to create any kind of anonymous transaction. It also means that bitcoin is a terrible tool for tax evasion. It also means that it will be trivial to provide back-dated proof of cross-border currency movement.

The block-chain is going to become a treasure trove of evidence for putting people away for money laundering.

It may.  But I could participate in a perfectly legal transaction off the blockchain by sending somebody private keys to addresses with bitcoins loaded on them.  I could then delete those private keys so that I can no longer spend the coins associated with their addresses.  If those coins are then spent, by and by, on something illegal, is that proof that I spent them on something illegal?

[townf]

In general, as a whole, bitcoin as it exists now is definitely anti-anonymous. There's not much that can be done about this without something like zerocoin or notes or receipts or some external abstraction.

People publish their addresses. Emails, true names, locations are associated with these. They transact with other people. These other people's identities are at risk.

Websites, exchanges, phone apps, personal computers, and other places that link identities to addresses will get hacked or subpoenaed. There are botnets, security and background checking companies that will make these associations for hire in the near future.

ISPs now monitor traffic for copyrighted content. Where does that lead to?

The NSA siphons every piece of data in this country into storage where it can be mined. This data has bitcoin addresses in it that will associate with at least an email address or a phone number. They will surely have teams of monkeys working round the clock on this, if not already.

Coin mixers currently require too much trust to be widely adopted. Besides, most people really don't give a shit about anonymity. This lessens the anonymity of the people who do, if they transact with them.

To make it anonymous for anybody, everybody has to be anonymous. That won't ever happen and it's too late for that anyway.

The connection of dots and loss of anonymity is a one way street. If you're careless once, those coins can always have an unerasable trail back to you and from you, in either direction.

[Sukrim]

Strongly agree with the title.

Even if I have my Bitcoin address in my signature, you can't prove that I actually own it unless you hack into my computer.

True if you don't  spend any. Once you do - out goes your identity.

How do you infer from a transaction being made from an address in a signature that the transaction actually was done by this person?!
If I would put there for example a MtGox address, it would be swiped but I'd never ever have owned the private key to it.

You will be only deanonymized for the address(es) that you use to pay a merchant from - and these can be from a mixing/proxy service.

[CoinHoarder]

No, Ripples are even less anonymous.

Anyhow, there are proposals to layer anonymity on top of bitcoin, for those who really need it. See:

https://en.bitcoin.it/wiki/Zerocoin

If you read the actual Zerocoin paper, you realize how many fundamental changes it requires to the Bitcoin protocol/process. It's not a layer on top of Bitcoin so much as a fundamental rethinking about BTC semantics. And it only works when a large swath of miners actually use it (you can't just use Zerocoin on your own account and expect it to protect you). This will be a long, slow process.

http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf

I really hope this is implemented into Bitcoin at some point.

It is a wonderful idea, I bet Satoshi would have loved it.

[proudhon]

Strongly agree with the title.

Even if I have my Bitcoin address in my signature, you can't prove that I actually own it unless you hack into my computer.

True if you don't  spend any. Once you do - out goes your identity.

How do you infer from a transaction being made from an address in a signature that the transaction actually was done by this person?!
If I would put there for example a MtGox address, it would be swiped but I'd never ever have owned the private key to it.

You will be only deanonymized for the address(es) that you use to pay a merchant from - and these can be from a mixing/proxy service.

Haha, idea!  Quick, everyone pick an address from the blockchain whose private key you do or don't own and post it in your sig.  Confuse OP.  

1PL8Xy3gb3GAuBCBjdMUoge67em6R7FXeL  <------ me?