Privacy vs. anonymity

[o48o]

They want it so bots can't front run their buys/sells, and they want it because it sells, way more then transparent transactions on the chain

That's an interesting point of view. Indeed, centralized exchanges have this downside in which they know when you want to sell or buy. They can approach what the majority wants and take advantage of it. They don't just hold your coins; they hold your interests.

I don't trade, but if I ever want to buy a cryptocurrency, I'll use a decentralized exchange instead. I highly doubt the majority will do either, but at least I'll feel alright with myself.

It doesn't only apply to centralized exchanges, i mean that your transaction history will be literally public forever on the blockchain when you use dex. Then it's only matter of doxxing the account, and in any point you need to change it to cash, it will be a weak point what comes to your ID, even if you would do it face to face, some people will see your face.

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[Ucy]

Well, I would simply consider Privacy as something that belongs or is known to you alone.
I typically see Anonymity as part of Privacy. If a user prefers to be anonymous, he doesn't want his name/identity to be public. He probably just wants to keep the information private.

So, I would go for Privacy because it covers anonymity. Ofcourse, we can't have 100% privacy, but it's important to claim the Right and make it a rule so that whoever is violating it will be owing you a debt the law could compel him/her to settle.  There is also the likelihood of  lawless non-human entity going through your private stuff

[Bitstar_coin]

We can always try to have some level of both, to keep away from prying eyes, in my case, all my social media accounts are not by my real name so there is hardly any connection to my real identity, since am not a social media person, I don't share personal photos or stuffs like that which can reveal any real identity, my emails are not by my real name except for my yahoo mail which I don't use online,
Yes I do have accounts with few exchanges that I have done kyc with which can definitely trace back to me if the need arises, but I try not to expose myself too much, it is not easy to do stuff that can make you completely private and anonymous in this present world because that will mean complete isolation.

[o_e_l_e_o]

It doesn't only apply to centralized exchanges, i mean that your transaction history will be literally public forever on the blockchain when you use dex.

The two are in completely different leagues. If I withdraw coins from a centralized exchange, then the exchange knows my real name and address and has copies of my ID, knows my bitcoin address I am withdrawing to, will use blockchain analysis to track that withdrawal to make sure I don't do anything illegal with it, and will share all that information with third parties and governments. If I buy bitcoin on a DEX, then a single person knows my bitcoin address, and might know my name depending on the fiat method we use. A DEX is far more private, and even has the potential to be anonymous depending on how you use it. A CEX is neither.

Then it's only matter of doxxing the account

The best DEXs don't require accounts.

and in any point you need to change it to cash, it will be a weak point what comes to your ID, even if you would do it face to face, some people will see your face.

It is incredibly easy given the current situation to almost completely cover your face and not appear at all out of place. Or if you really need to be anonymous you could use an anonymous money order, cash in the mail to a PO box, cash drop off, etc.

[20kevin20]

Great topic, Dave. I seem to care about both equally. I care about my privacy as much as I care about my anonymity. I did indeed make a lot of mistakes in the past and I am still making them, but I am getting better at it overall and this is the best part.

I have separated my "public" life from my private one. I've done big changes in my lifestyle to accommodate with my private way of living. This means getting rid of many accounts and platforms people typically use, carefully choosing specific smartphones and the software & OS I'm running on them (same goes for laptops and PCs), taking cameras and mics out of my devices, preferring to pay more rather than share my data with strangers and so on.

One perfect example I'd like to give is getting rid of "discount cards". Pharmacies, stores etc here in Romania have certain "discount" or "loyalty" cards that we can use to buy stuff for cheaper. But this data is almost every time linked to very personal information of yours such as ID, driver's license etc. I can now create a card within 2 minutes and buy stuff for up to 70% cheaper - but is it worth the discount? Is my personal data worth a 70% discount at a supermarket? In my opinion, it is not. It's worth much more. So I ditched my cards and now I'm paying much more money for everyday stuff. But my local pharmacy doesn't know anymore what kind of treatments I take, what kind of condoms I buy, whether I prefer cash or card and which card do I use for certain products.

Now let's go back to BTC. I think that if you care about privacy or anonymity, Bitcoin is for now a bad choice. That is until BTC <-> XMR atomic swaps become easy to use (and widely used) and are tested well enough for bugs to be extremely rare or inexistent (which I think is impossible since, AFAIK, any code has a flaw - you just need to find it).

Also, that is until Bitcoin adopts a more private way to go. Perhaps Schnorr signatures are the first good step. I don't know - the point I'm trying to make is, Bitcoin is still a transparent ledger and no matter how much you try to be private, one mistake could reveal your entire history. That is very, very bad - almost as if you robbed 100 banks, got caught for one but they linked all 100 to you. That makes everything so much worse for you legally. Sorry for the example - I never really link privacy to bad stuff since privacy is NOT being a criminal, but this is the best one I could think of.

On the other hand, even XMR isn't good if you're inexperienced. Use the same address on multiple websites while shopping and you're about to get some of your financial history linked together.

Now let's see what you can do about it.
- Make your BTC private or use XMR. When shopping, try to avoid online shopping as much as possible so that the address & name issue is avoided.
- Use Coin Control for Bitcoin. Use disposable seeds/addresses for XMR or BTC. Use disposable SIM cards. Use disposable, $10 mobile phones. Dispose of anything you can afford to dispose if you want to keep your tracks limited and harder to link.
- If you create a ProtonMail account, use Tor. Pay with private Bitcoin and then mix your coins again. Yes, you pay for an account creation, but if the Switzerland ever gets ProtonMail to share your e-mail's logged IPs, your home IP will never appear there. Do the same for a BitcoinTalk account. Try to keep your traces as limited as possible.
- Use DEXs instead of centralized exchanges. This is one of the best ways to keep everything private.

Living a private life is expensive, so I have to miss out on a lot of stuff to live mine that way. Sure, it's expensive, but at the end of the day you feel so much safer knowing there's no camera watching you, no mic listening to you, nobody tracking your pharmaceutical purchases and, ultimately, having no stranger in your private bubble.

[sgenuine]

As for me privacy and anonymity means almost the same when nobody knows about your capital. I used to think that crypto is anonymous when I only got acquainted with it, but then I understand that I can track all wallets and get to know how many tokens are hold on them. Everything is put in  blockchain so it is possible to follow any transaction so the only way to get privacy is to use coins such as Monero or platforms such as Tornado cash.

[o_e_l_e_o]

the point I'm trying to make is, Bitcoin is still a transparent ledger and no matter how much you try to be private, one mistake could reveal your entire history.

In my opinion, your set up should be designed so that one mistake cannot compromise the entire thing, be that for security, privacy, etc.

When it comes to securing coins, most of us will use multiple wallets with multiple different seed phrases. Some of us will go a step further and use one or more passphrases on one or more of those wallets. Some of us will go a step further still and have multi-sig set ups. In my case, the only thing which someone could steal by me making a single mistake would be my mobile hot wallet, which holds trivial amounts of coins. I would have to make multiple mistakes to reveal multiple seed phrases and passphrases for someone to compromise one of my main wallets, and even then, my other wallet would still be protected.

A similar thing applies to privacy. I keep coins from different sources in different wallets which I access on different devices. I mix, coinjoin, and swap all my coins. I am meticulous about where my change ends up. If I was to accidentally consolidate some change outputs together that I didn't mean to, then worst case scenario the guy I buy coffee from will also see that I bought something from the farmers' market. I would have to make multiple mistakes of creating and transferring a PSBT between wallets to accidentally link coins together which would significantly compromise my privacy.

You should design your set up so you that a single accidental click on the "Send all" or "Max" button will not compromise everything.

On the other hand, even XMR isn't good if you're inexperienced. Use the same address on multiple websites while shopping and you're about to get some of your financial history linked together.

XMR uses subaddresses for this very reason.

[Pmalek]

A funny thing about privacy and anonymity. You can take all the precautions you want, never submit KYC to any centralized entity dealing with cryptocurrencies, and make sure there are no connections to your entire Bitcoin portfolio. But if you walk into a store and purchase something with Bitcoin, there is at least one camera recording you while you do it. The cameras see you come in and go out. It's the same thing when you walk around your town. Cameras with face recognition technology record your movements. A face can get tied to a signature and a fingerprint. If someone (the government) wanted to retrace your steps, they could.

The government: Oh look, John Johnson just bought something with Bitcoin. Let's use our mass surveillance technology to find other instances where he used Bitcoin. Interesting, he has been buying goods for the past 7 years all around town. How does he have it, where does it come from, have we taxed it? Let's get him...

I am exaggerating, of course. Privacy and anonymity can be preserved so that the Average Joe doesn't find out who you are. But if you become a person of interest for someone higher up on the food chain than you are, not so much. They will take your life apart. 

[blatchcorn]

But what about you? Do you care more about privacy or anonymity or both equally?

Pardon me if I am not on track, I am writing in best of my understanding about this post and after reading o_e_l_e_o comment.
To me remain anonymous is mandatory because of crypto regulations in my country. So it's not a choice rather compulsion. While privacy is not an issue, as long as I m dealing in other countries. I don't mind giving my email n I'd to binance for kyc. Since I trust them that it won't go in bad hands.
These are just my few satoshis.

[franky1]

anonimity is about not associating WHO to a bitcoin payment
privacy is about not associating WHAT that bitcoin payment is for

lets take the previous poster who says anonimity is mandatory to him..(blatchcorn)
yet in 30 seconds
i have associated these addresses to him
bc1q9mks3l560y3tsauc0n4w4ym4nr0v6450tv6x7e
1J4ZCUuarqFTRRUtcQAaUJ4oLAVhx75bM6
^2 addresses of poster just publicly admitting his addresses

v over a dozen addresses using same wallet as the 1j4Z address
14ZveSen3Gmrmy3Acgq74UY1BMxRPPaT5j
1DzxpCB1i6j1JZygnhiqfTiL4hA3q5RYmr
1tm98b3uyngMaVUKpqKMgkB1QNm8r8DJL
1BUEPSa4q7dpedGrgpdTfKhkfmLBeLq2DQ
1NAb9qsmZ64pL6GA1DnkGktCtHTCFJvmVu
162QxHMPExaaYYX8jZtfB6mebu4N6WDZZh
139W3wAhtC3fqLLNvrPHxqDqyXUStL29aC
1HcWrqwmRHj1LXB8jh7Ls96zkZqwVuZeKZ
1KE27MdwfuCX7bSmBY4pfxP29fUAxVP5gR
1KutFw96EppvJUz4ed6ep1MKEUNzzANjCy
1GM4qUkP7eCwjJdR88S15yBMdegNjKyDXx
1HHu7BzFfZfxLq8sV19JTzjeiPrRejiMQC
1PauCQiDZXP3CfmHM73ysk48K4vDJAvv9t

oh, and he is from UK. and atleast 6 years ago lived in birmingham

and he has admitted and associated addresses have shown proof of his use of mixers. meaning he has admitted to a crime of laundering.

so 30 seconds has found enough info for UK police to spend more time on someone that confessed to a crime

oh and his binance hotwallet deposit address seems to be
bc1qdlue5pymx4hx8nlsgqsyllk8w9dexnac402uwh

..
just saying. its kinda easy to get info just by clicking a few buttons from a novice that doesnt even have all the analysis tools that some have

[20kevin20]

~

That's exactly what I mean when I say that separating my private life from the public one was the way to go for me. I think that preserving your anonymity or privacy means restarting from zero every time you make a mistake.

It's safe to assume that my account's history would get you to a lot of quite personal information about me. The languages I speak, the country I'm from, the sig campaigns I've been part of, the addresses I've used etc. However, by creating a new lifestyle, you can now not link my account history to my private life anymore. The governments know I'm using crypto anyway right now, so abandoning this account is useless really. I chose to still enjoy the forum on my original account.

This is what privacy & anonymity is about, I believe. It's about learning from mistakes and resetting every time you make one. Acknowledging your mistakes and continuing to get better at it. Am I then to be called a "privacy advocate"? Or an anonymous user? The forum account maybe not, but I do have.. let's say "a separate face" that has nothing to do with my current account.

[Ararbermas]

If I took the BTC from the signature campaign (chipmixer) and sent it to an exchange that just required an email address and converted it to a cryptonight coin then withdrew it to my wallet, sent it to another wallet and then to another exchange that once again just required an email address I think we can all say that the ability to trace anything at that point would probably be impossible. Now I have my private BTC. What do I do with it? The second I buy anything that requires shipping well there goes privacy. Yes you can drop ship someplace but unless you go to the 'we don't ask' mailbox location there is still a trace. OK, lets not buy stuff that needs to be shipped. How about gift cards from bitrefill or coinsbee? Well if you get a chipolte card get a burrito with it, they know something about you and where you got your gift card and where you used it. And so on.


-Dave  

if your really care about your privacy then used a dummy email when it comes exchanges.. And if it's possible to covert your crypto into real fiat probably much better, so that when you're buying any stuff online you don't need to worry.
Actually that's what I'm doing everytime i earned crypto here in forum and with the help of my digital wallet "coins.ph" it's so easy to convert crypto to fiat within the wallet. But I'm not using the same wallet for making transactions online such buying stuff.. Wherein i used another digital wallet for it and that's where my money always out everytime i need some cash,  no more worries.  

[BlackHatCoiner]

Now let's go back to BTC. I think that if you care about privacy or anonymity, Bitcoin is for now a bad choice. That is until BTC <-> XMR atomic swaps become easy to use

I'll assume it someday becomes easy to swap BTC for XMR instantly and that bitcoin is globally adopted. What's the purpose of doing that? What is the purpose of having BTC instead of XMR in the first place? I find it unlikely, but lots of developers may start switching to a more privacy-oriented cryptocurrency. Don't they say the good is beaten by the better?

Maybe in the long run, the CryptoNote protocol becomes more wide-spread. Bitcoin has the uniqueness of being the one we've all agreed, but it doesn't have this usefulness.

the point I'm trying to make is, Bitcoin is still a transparent ledger and no matter how much you try to be private, one mistake could reveal your entire history.

And it's not just that. You may be careful and coinjoin, mix, use coin-control etc., but if they just exclude those who aren't careful, they're closer to identify you. The key is to force everyone; it is to make privacy achievable in a protocol level, not in a user level.

Living a private life is expensive, so I have to miss out on a lot of stuff to live mine that way.

Including a smart phone. Can you live without a smart phone?

[o_e_l_e_o]

To me remain anonymous is mandatory because of crypto regulations in my country.

I don't mind giving my email n I'd to binance for kyc.

These two opinions are mutually exclusive. As soon as you complete KYC, you are no longer anonymous.

Since I trust them that it won't go in bad hands.

Your trust is misplaced, since Binance (and companies they own such as CoinMarketCap) have been hacked on multiple occasions for user information.

meaning he has admitted to a crime of laundering.

Mixing coins does not mean you are money laundering, nor is mixing coins a crime (unless there is some UK law of which I am unaware).

What is the purpose of having BTC instead of XMR in the first place?

If we ever reach a stage where BTC is globally adopted, then governments will likely only permit its use precisely because it is an open ledger, despite some users taking steps to obfuscate their transaction and history. No government would ever accept widespread use of a completely untraceable coin like XMR.

[hazenyc]

I'd like to admit that when I first got started with crypto, I was big on the whole privacy and anonymity thing but over time, I think that took another direction. I mean, I've a couple of jobs that required me to do a video call with people and a couple of other thing that revealed a thing or two about me. I think many people got into crypto for privacy but everything changes at some point. I know those people that were big on privacy projects have, at some point,compromised themselves too.

When you say that you took privacy and anonymity very seriously when you started with crypto, that also implies that you fully understood how privacy and anonymity in the crypto context really plays out! I would argue that most of the people getting into crypto, even those who joined pretty early, didn't 100% certainly know how this sector would develop and what is required to really, really stay anonymous and leave zero trails.

When I thought about that topic, I frequently asked myself: "What is required to really stay anonymous in this game?". The fact alone that this answer has changed over time, clearly reveals that I would have fucked up in the beginning anyway if I intended to stay anonymous back then. I learned so much new stuff so quickly and realized again and again that staying anonymous forever is almost impossible for literally everyone. Nobody really knew in 2011 that obfuscation protocols would show up soon. Mixers were around pretty early, but it seems that some of them can be cracked by Chainalysis and so on and so forth. I am just saying that staying anonymous with steps required today doesn't mean that measures taken today also ensure anonymity in the technological context of tomorrow.

Those who can anticipate even that and understand how the future most likely plays out with technological advancements in relation to certain capabilities of protocols, seriously, that is a very very small number people being able to pull that off.

[franky1]

meaning he has admitted to a crime of laundering.

Mixing coins does not mean you are money laundering, nor is mixing coins a crime (unless there is some UK law of which I am unaware).

"mixing coins" has no law or regulation against it. you are correct. but the vocal conversation of wanting to launder value (in any currency) is a AML flag(its why some exchanges blacklist coins with such taint by default)

changing fiat to say poker chips.. and then swapping different casino chips with friends in some basement. is not unlawful. but the act of starting with fiat deposited at casino #1 and ending up with fiat from casino #3+#5 would flag up as a AML flag that a bank seen $10k->#1    and then a few days later #3+#5-> $10k fiat

so although the act of casino chipping is not regulated/monitored. . the bank(fiat) will show a discrepensy of deposit-withdrawal from different places and ofcourse an investigation would occur. not just for AML. but just to ensure about tax into on the magical $10k the bank account later received that cant be explained. thus treated too simply as new income of $10k. rather than just a refund of an earlier $10k spend

EG the situation could have been seen as going to las vegas with $10k. and just spending it. hotel, hotdogs, tours, entertainment.. money gone. poof.  then a month later a strange new $10k appeared elsewhere.

so by admitting it was not a spend of $10k and then a refund of $10k (net zero profit). questions then arise as to how money went into one business but came out of another business

again. fiat regulations dont/mostly cant look at all the movements of crypto..
but if they see $10k go into one exchange.. and $10k come out of another exchange. it can light up some flags
then there are the exchanges own policies to keep them regulated on their fiat side by KNOWING more about the btc side to protect their fiat licences... they may see some coin deposits in and out that look suspect so they make a report themselves. which linked with the bank accounts flag draws more attention to the person.

i know i know you have been hearing rhetoric from certain devs that want 'mixing' to be normalised soo much that it becomes part of standard currency fungibility. but what a dev wishes society to be is not how the banking/government regulate society and investigate society

[20kevin20]

~

I think that having Bitcoin is still useful even with an user-friendly XMR - BTC atomic swap system existing. There are just so many people who link privacy to crime. They would probably never like the idea of Monero and automatically think of criminals when hearing about it. Atomic swaps come into help here: you can pay with BTC at a XMR-accepting store and you can pay wkth XMR at a BTC-accepting store. You can use swaps for trustless trading. You can use them to trigger from privacy to public and back.

The idea of having privacy as a default in BTC is good for us, privacy advocates, but you can only imagine how much oppression there would instantly be from the governments. They love Bitcoin currently because they have Chainalysis and a lot of people who don't give a damn about their own privacy. It's the paradise of surveillance right now. Should we get default privacy with BTC, things would change drastically. I bet.

Also, living the life without a smartphone is very possible. In fact, living without one is so much better. Ditch your smartphone for a week and see for yourself. You can always have a smartphone without a SIM card in it that you only use for WhatsApp or so and never take it with you outside.

[Stedsm]

Privacy can be kept when we hide things that we do. Let's take an example of our ISP, they do know what we surf and where we go, even with the use of a basic VPN, we still can't stop them from knowing what we are doing. So, privacy is not that easily possible.

Now let's come to anonymity. The way you said you can do everything, you missed out on a few things. If you are doing everything with a specific smartphone, then they also get your details like IMEI number, Mac ID, sim card carrier, phone's model number, etc. Though it's not easy to crack our location, but if those secret agencies smell anything suspicious and would start looking for us, it won't be any hard for them to reach us. Where is anonymity?

We all speak a lot about both privacy and anonymity, but all these things are very very limited in our real lives compared to the talks we had about. From centralised exchanges to going for kyc on any sites, to knowing people and letting them know about us that we hold crypto, most identities are already under the radar who have already opened up about both BTC and themselves being in crypto.

[o_e_l_e_o]

I would argue that most of the people getting into crypto, even those who joined pretty early, didn't 100% certainly know how this sector would develop and what is required to really, really stay anonymous and leave zero trails.

This is a good point. Almost everyone new to this space does not appreciate the privacy implications of their actions until well down the line, and it is significantly harder to regain lost privacy than it is to not lose it in the first place. There comes a point once you've KYCed on multiple exchanges and revealed your wallet addresses to multiple blockchain analysis companies, that nothing short of sending all your coins back to the exchanges you bought them from, selling them, withdrawing the fiat, closing all your accounts, and then starting again from scratch with DEXs, will be enough to claw back some of your privacy. Almost every newbie guide or "How to buy bitcoin for beginners" encourages people to go straight to Coinbase or some other privacy invading CEX and send all their documents immediately, without so much as a second thought. Only individuals who are already very privacy conscious are likely to search for and find other methods to get involved in bitcoin.

but if they see $10k go into one exchange.. and $10k come out of another exchange. it can light up some flags

Does this happen in practice? Having never used centralized exchanges, I'm out of the loop on this one. If you deposited $10k (or £10k since I think you are UK based?) to Coinbase, and then next month transferred the same amount from Binance back to the same bank account, would you be flagged up as money laundering and get threatening letters from tax agencies and law enforcement? I've never heard of that happening.

that you only use for WhatsApp or so and never take it with you outside.

Or, use Signal and you can just download the desktop app. No phone needed. Also, WhatsApp is closed source and owned by Facebook - the antithesis of privacy.

[hazenyc]

I would argue that most of the people getting into crypto, even those who joined pretty early, didn't 100% certainly know how this sector would develop and what is required to really, really stay anonymous and leave zero trails.

This is a good point. Almost everyone new to this space does not appreciate the privacy implications of their actions until well down the line, and it is significantly harder to regain lost privacy than it is to not lose it in the first place. There comes a point once you've KYCed on multiple exchanges and revealed your wallet addresses to multiple blockchain analysis companies, that nothing short of sending all your coins back to the exchanges you bought them from, selling them, withdrawing the fiat, closing all your accounts, and then starting again from scratch with DEXs, will be enough to claw back some of your privacy. Almost every newbie guide or "How to buy bitcoin for beginners" encourages people to go straight to Coinbase or some other privacy invading CEX and send all their documents immediately, without so much as a second thought. Only individuals who are already very privacy conscious are likely to search for and find other methods to get involved in bitcoin.

That, I believe, is the most relevant aspect of this discussion anyway. Even using TOR isn't safe, it just raises the probability of not getting identified. Just have a malicious entry or exit node by operated by the NSA (which is definitely happening) and there you go. So people who use TOR think that that is the ultimate measure to take when it comes to staying anonymous, but it is not.

Would be interesting to ask the best security expert in the world: What should I do (online, but even offline) today to make sure that actions in the digital / physical realm can't be tied to my identity in ten years from now?

Ten years is deliberately chosen here because that would have been a question for someone who joined crypto in its very early days.