Lack of privacy in transactions?

[cdnbcguy]

Am I understanding the mechanism for transactions properly or is it possible for someone who knows what they are doing and has a lot of computer power to spare (say the US Govt..) to build a mostly complete database of all transactions?

Some people have public notices like 'donate to 1BgTiqXhPkWtTDAeEaECUB4A9VxakLhGE1' - isn't the public key in the block the preimage to the hash digest '1BgTiqXhPkWtTDAeEaECUB4A9VxakLhGE1'?

How hard would it be to scour the net for these and match them up to the public keys we have so conveniently handed over?

I wonder if perhaps some Chaum-ian blinding scheme might be in order - thoughts?

[galeru]

All the transactions are public already, by Bitcoin's design.  As for the addresses used, it's true that publicly available addresses for any reason can be discovered, although it doesn't really matter, as you publicized it.  The privacy of Bitcoin comes from the concept that you can just create an address and send some btc to it, and now nobody knows who owns those coins.

[theymos]

Am I understanding the mechanism for transactions properly or is it possible for someone who knows what they are doing and has a lot of computer power to spare (say the US Govt..) to build a mostly complete database of all transactions?

No supercomputer is needed. I've already done it:
http://blockexplorer.com/

How hard would it be to scour the net for these and match them up to the public keys we have so conveniently handed over?

Pretty easy to get a list of addresses<->people. Then by following transactions you can get many more addresses owned by the same person. It's harder to see how they got coins, or how they spent them, because Bitcoin tries to mix coins around to some degree. Certainly not impossible, though.

I wonder if perhaps some Chaum-ian blinding scheme might be in order - thoughts?

How do you do this in a decentralized way?

[FreeMoney]

If someone wanted to hide even donations on their website a script can easily be written to give each visitor a new address. Now you only know how much you gave them. Bitcoin can be used for anonymous giving/buying, but it isn't magic you can give your identity away easily.