Bitcoin privacy

[runningwolf]

We heard, in recent months, about exchanges flagging user funds coming or outgoing to services using CoinJoin. We heard about people having to post detailed personal information about the source of funds. There were also other events suggesting that Bitcoin surveillance is becoming an issue and that people withdrawing coins to "unhosted wallets", as they call them, are targeted by the compliance system.
This article provides a good overview of some of the relevant events and how they influence Bitcoin's fungibility:
https://bitcoinmagazine.com/technical/bitcoin-needs-better-privacy-for-fungibility

This article instead provides a review of existing privacy-focused projects
https://bitcoinmagazine.com/technical/list-of-bitcoin-privacy-proposals

The thing is that there already are some good enough solutions but too few people use them, so they stand out from the rest of the transactions. People need to become more privacy-oriented. 

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[BlackHatCoiner]

While Bitcoin’s transparent ledger provides auditability, the lack of privacy is hurting its fungibility and introduces censorship attacks of different kinds. Increasing bitcoin privacy is one solution.

No, it's not, at least that's my opinion. You don't give a solution to such political problem by improving privacy. Bitcoin's privacy isn't hurting its fungibility, centralized exchanges do. Not using those who treat it as non-fungible is a solution. Don't comply with their rules, and "taint coins" becomes a matter of the past. It's a nonsense either; a direct surveillant attack to you, along with KYC.

As a quote goes,

When centralised oppression fails, we will decentralise.

And so we do.

[Charles-Tim]

The thing is that there already are some good enough solutions but too few people use them, so they stand out from the rest of the transactions. People need to become more privacy-oriented. 

Privacy is very important and helpful, but as people are getting to know about bitcoin, the more you will see more people that will not go for privacy or anonymity. I too will recommend people to be private but they have a lot to avoid, example are traders, it will be difficult for day traders and those that trade frequently not to use centralized exchanges, but for people that wants to hold or be using noncustododial wallet, privacy is very possible.

It is becoming a time some people will have to buy items online with bitcoin in a way privacy may not be possible. That is why it is very good for some people to make certain part of their bitcoin transactions and holding not to link to anything centralized like exchanges or shopping in a way your main holdings that is meant to be private can not be linked to your real identity.

Privacy is possible, but it requires people to have knowledge about it with the use of Tor, VPN (Tor is better) with mixers, decentralized exchanges and noncustododial wallet and if need be to use bitcoin to shop or for anything centralized like exchanges, it so good to make sure you have a good way your privacy life is not linked to the other one you used for centralized services.

[DaveF]

I know I have said it before, but until we can come up with an agreement as to what 'privacy' means this entire conversation will keep going around and around.
Then you have the issue that privacy means different things to different people and in different amounts.
And there is the entire privacy vs anonymity discussion too.

IMO Bitcoin is not private, every transaction is out there for everyone to see. It can however be anonymous. Might take some work but through exchanges that require no more then an email address and so on you can make it just about impossible to trace. But private, no.

Just a small rant but terminology is important.

-Dave

[PrivacyG]

The thing is that there already are some good enough solutions but too few people use them, so they stand out from the rest of the transactions. People need to become more privacy-oriented. 

I am interested to know why some people just never care.  I am too tired of the 'nothing to hide' argument and need a real reason someone should not worry about being spied on.  Because at the end of the day, most of us are looking for freedoms and democracy and it makes no sense then to accept surveillance.  To me there is a clear, distinctive line between freedom and surveillance.  When surveillance begins, freedom starts to end.  That is how I perceive it.

One thing I have to mention.  Too few people use these good solutions because they require some level of knowledge to begin with.  Binance requires required before implementing mandatory KYC just an account registration and you could move money around already.  And there is password recovery, there is a supposed reimbursement in case the exchange gets hacked, there is customer support.  Bisq puts all the responsibility in your hands.  You have to do and know much more about Bitcoin to use Bisq than you need to know to buy Bitcoin off Binance.  You can not quickly, easily do Fiat to Bitcoin and backwards exchanges on Bisq as easily as you can with Binance.

Besides gaming and a very small list of other reasons.  Why are people generally choosing Windows over Linux?  Popularity and easy to use.  This is why it took me many years before fully moving over to Linux as well.  I was just lazy and thought I would rather spend my time learning something other than how to use a Terminal and all of that.

Might take some work but through exchanges that require no more then an email address and so on you can make it just about impossible to trace.

I agree that privacy means a lot of different things to different people.  But this particular part of your post, I would argue it is very hard nowadays to create an account that is impossible to trace on exchanges.  Maybe instant exchanges that require no JavaScript and allow Tor usage.  There is or was at least one on KYCNotMe allowing this.  But just requiring an e-mail or not allowing Tor can make it so easy to backtrace an user if there is interest from an authority.

-
Regards,
PrivacyG

[amishmanish]

Bitcoin privacy depends on the platform being used for making the transactions. Any transaction through  centralized exchange is bound to  go through scrutiny. Bitcoin by default is anonymous, But now it has become pseudonymous. The transactions are made through phanumeric strings  recorded on the blockchain. But still IP address and other info can be tracable.
if you intend to stay anonymous in your bitcoin transactions you can use differnt methods like using TOR onion for staying anonymous while brwosing, using bitcoin mixers and using logless VPNs

[Dunamisx]

We heard, in recent months, about exchanges flagging user funds coming or outgoing to services using CoinJoin

we shouldn't forget what blockchain really is, an "open distributed ledger" meaning everyone can see your transactions in the blockchain but cannot alter it, but what we should be more concerned here is what exchange or wallet do we make use of, if we use a centralized exchange then we are not secured privately, the best option is to use a decentralized exchange or run a full node by downloading the entire blockchain.

Bitcoin surveillance is becoming an issue and that people withdrawing coins to "unhosted wallets", as they call them, are targeted by the compliance system

you don't need to worry about what others sees as long as they cannot alter it, that's why blockchain is immutable, if you follow the above steps you can't be tracked down.

[The Cryptovator]

We can't prevent privacy when we are using CEX. They have control over the funds and they might ask for a source due to law enforcement. We care about privacy but we are hopeless due to some reason. For example, selling crypto is prohibited in my jurisdiction. I know I may use p2p dex to cash out. But sometimes it's too harassing and high fees
 Binance gives it free and a deal could be done within minutes. So here my privacy is already shared, so we are hopeless here. Somewhere we have to reveal our privacy.

[laurenB7742]

When you use a centralized exchange and deposit Bitcoin to it, they just represent the digit on your balance tab. Actual BTC goes to their hot wallets/cold wallets.
So, the process is like the banking system, both of them show digits on the balance tab, but do not give you the control of original funds.
Privacy and anonymity on the exchange are zero, they can ask for your KYC anytime and they can freeze your funds if they want. It is not a rare case that exchanges get attacked by hacker and loses both funds and sensitive data of their users. So when you use the exchange you can't expect privacy/anonymity at all.

Now come about hardware wallets or software wallets, In here privacy will depend upon your experience, if you know how to keep yourself untraceable and how to secure your data then these are 100% anonymous and secured. You must have to know what you are doing and how to keep yourself untraceable.

[PrimeNumber7]

I know I have said it before, but until we can come up with an agreement as to what 'privacy' means this entire conversation will keep going around and around.
Then you have the issue that privacy means different things to different people and in different amounts.
And there is the entire privacy vs anonymity discussion too.

IMO Bitcoin is not private, every transaction is out there for everyone to see. It can however be anonymous. Might take some work but through exchanges that require no more then an email address and so on you can make it just about impossible to trace. But private, no.

Just a small rant but terminology is important.

-Dave

In theory, it should be possible to transact without the transaction being public via LN. Ditto with any kind of bearer certificate of a specific unspent output (although the latter is more complex).

As long as you are using a means that results in transactions being public, I don't think it is possible to ensure that your transaction will be anonymous. To even attempt anonymity, you will need to rely on others, both in their previous behavior, but also their behavior in the future.

[sheenshane]

If you care about privacy always use DEX in any of your transactions using crypto.
In CEX, you can't prevent disclosing your privacy over the internet, it's pretty normal since CEX was following the government protocol and government fighting against fraud and I understand that matter.

The thing is that there already are some good enough solutions but too few people use them, so they stand out from the rest of the transactions. People need to become more privacy-oriented. 

It's pretty necessary for your own good but you will face difficulties if you don't know how to deal it with, we need fiat to convert our crypto assets and fiat are heavily regulated, it will surely be linked any of your online wallet accounts.

[rby]

The thing is that there already are some good enough solutions but too few people use them, so they stand out from the rest of the transactions. People need to become more privacy-oriented. 

I am interested to know why some people just never care.  I am too tired of the 'nothing to hide' argument and need a real reason someone should not worry about being spied on. 

Actually some people doesn't care and that is the truth, they don't care.  The real reason some people do not care about their privacy is ignorance. That is the major reason. In their tones, what has privacy got to do with someone that cannot afford three square meals per day. Does privacy bring food to the table?
Some could say that they aren't criminals and it means that the government cannot come after them, why the need for privacy.
Many people do not understand the importance of privacy and some who understands don't know how to go about it. How private can one be, when your data in with the government in one way or the other. So many has given their privacy to social media. So if you remember that you have made some privacy mistakes in the past, maybe there is no need protecting an already exposed privacy.

[runningwolf]

Problem with all the above answers is that you say something like: "As long as I know how to use the tools and I stay private everything is fine". No, it isn't. One day someone may decide to send dark sats to casual people automatically placing them on a list. Someone may target specifically some high profile individuals. Anyone can get some dark bitcoin and find themselves under surveillance. The issue extends also to hedge funds. This, in turn, hurts fungibility.
So to me there're two solutions. KYC applied to everyone isn't a good solution because it becomes like Orwell so this one is out. The other one would be to increase awareness of privacy oriented tools and make people use them. Every wallet should have some built in privacy solution. The question is which one is best because they aren't all so efficient.

[franky1]

exchanges are complied by regulation to flag money laundering..
..
coinjoin (mixing) by its very definition is laundering.. of course exchanges are going to flag coins seen as coming from mixing services.

its literally people stupidly doing laundering to hide whatever less petty criminal thing they might have wanted to hide. yep they actually getting themselves into more of a tight spot by trying to hide the origins. because the hiding event is the flag they hoped to avoid by hiding


..
anyways
i personally won the "anti-hero" title of the recent forum competition, and got some coin from different services as a prize. one being a mixing service. i have declared that prize as dead to me. because i cant see myself ever depositing it into a central exchange and getting a smooth experience.

and i am definitely not going to spend/sweep them into my other main wallet of legit stash. as that will taint the lot.

to me they are just coins i will use within the bitcoin network for giggles. totally separate from my main wallet. never intending to exchange them to fiat.

(well i dont need to swap for fiat anyway.. but i am not going to be using those prize funds anytime soon if i had to convert to cover any fiat spending needs)

in short. if you have coins that were mixed.. dont expect a smooth ride if your going to deposit them into an exchange.. because those coins are "laundered"

[Despairo]

coinjoin (mixing) by its very definition is laundering.. of course exchanges are going to flag coins seen as coming from mixing services.

its literally people stupidly doing laundering to hide whatever less petty criminal thing they might have wanted to hide. yep they actually getting themselves into more of a tight spot by trying to hide the origins. because the hiding event is the flag they hoped to avoid by hiding

in short. if you have coins that were mixed.. dont expect a smooth ride if your going to deposit them into an exchange.. because those coins are "laundered"

But there's nothing wrong if some people use it to hide his identity and as we know the current world conditions are pretty much related with digital stuffs. Do you feel safe if you told or posted all of your Bitcoin on social media? You will get blackmailed and beggars asking for a donation, also don't forget about random people send you a malware. Although Bitcoin was designed as pseudonymous which is not anonymous and you can be tracked on the block explorer, but Satoshi never said he's against mixer or privacy concern stuff.

I disagree mixing is same as laundering, take look with money laundering definition:

Money laundering is the process of concealing the origin of money, often obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions with varying definitions. It is usually a key operation of organized crime.

You're right about concealing the origin of money, but you're also wrong since not all of them mixing their money because they got it from illicit activities.

[franky1]

coinjoin (mixing) by its very definition is laundering.. of course exchanges are going to flag coins seen as coming from mixing services.

its literally people stupidly doing laundering to hide whatever less petty criminal thing they might have wanted to hide. yep they actually getting themselves into more of a tight spot by trying to hide the origins. because the hiding event is the flag they hoped to avoid by hiding

in short. if you have coins that were mixed.. dont expect a smooth ride if your going to deposit them into an exchange.. because those coins are "laundered"

But there's nothing wrong if some people use it to hide his identity and as we know the current world conditions are pretty much related with digital stuffs. Do you feel safe if you told or posted all of your Bitcoin on social media? You will get blackmailed and beggars asking for a donation, also don't forget about random people send you a malware.

i have never needed to use mixers. and for years now i have mentioned having a large stash of bitcoin from the early days, and i have never been blackmailed or sent crap.. why. because there are many ways to hide.
mixers are the worse kind because your using a criminal activity to hide in most cases a not so much bad activity.. its like murdering someone to hide the fact you stole a mars bar from a convenience store.. its absolutely stupid to do this.

instead do the smart thing. dont advertise your main stash address publicly. yes talk figuratively and if asked discuss things but dont tell people what type of system you have at home or if your using a hardware wallet a desktop node or a phone litewallet or if you have private key backups stored anywhere.
if your smart enough you can separate your social media/forum activity from your real world employment/business activity and also keep that separate from your family life.

i have been here since 2012 and im still good without needing to resort to using things that will cause red flags.


here is the thing..
if you truly want privacy.. forget wanting services to cater to providing you privacy, and instead think about your own actions first.
as you say your worried about people finding out about your value on social media.. well then stop posting your bitcoin address on it and they will never associate you to any given address.
if you dont want scam emails. then dont sign up to random crap that asks for emails.
if your too fluid and open with your activities and hope some central service or other system/ app platform can give you privacy.. forget it. its starts with you.

..
its like the cries i hear about private key backup. everyone wants some central service to back up keys to take away the users liability of stupidity should they lose their key and put the liability/blame on some service. where infact its up to the users to be more cautious about how public they are and their activities.
you cant blame an exchange for freezing its service offering to you because you broke its rules. by money laundering. you have to realise your action caused the freeze and adapt and be responsible.

mixers are a waste of time anyway. imagine you are a innocent guy doing nothing criminal. but you used an address for something embarrassing.. maybe you dont want your wife seeing that you bought a porn subscription or a sex doll.. so you use a mixer..
the thing is. actual criminals are the majority of mixers users.
so now your sex doll tainted coins. are mixed. and you instead get coins from some large organised crime scheme that can get the holder 20years prison time if found.
so now not only are you laundering but you also received coins from some large illicit criminal scheme like human trafficking, terrorism or illicit porn or drugs..
now you have 2 investigations happening on your account.

was it worth it to hide your sex doll fettish?

[LoyceMobile]

I am interested to know why some people just never care.  I am too tired of the 'nothing to hide' argument and need a real reason someone should not worry about being spied on.  Because at the end of the day, most of us are looking for freedoms and democracy and it makes no sense then to accept surveillance.  To me there is a clear, distinctive line between freedom and surveillance.

Most people simply don't care. It's much easier to hand over another copy of your passport than it is to be the one person to start a discussion about the (illegal) demand to keep a copy of your documents.
Compliance is easy! Dumb, but easy.

[runningwolf]

coinjoin (mixing) by its very definition is laundering.. of course exchanges are going to flag coins seen as coming from mixing services.

its literally people stupidly doing laundering to hide whatever less petty criminal thing they might have wanted to hide. yep they actually getting themselves into more of a tight spot by trying to hide the origins. because the hiding event is the flag they hoped to avoid by hiding

in short. if you have coins that were mixed.. dont expect a smooth ride if your going to deposit them into an exchange.. because those coins are "laundered"

But there's nothing wrong if some people use it to hide his identity and as we know the current world conditions are pretty much related with digital stuffs. Do you feel safe if you told or posted all of your Bitcoin on social media? You will get blackmailed and beggars asking for a donation, also don't forget about random people send you a malware.

i have never needed to use mixers. and for years now i have mentioned having a large stash of bitcoin from the early days, and i have never been blackmailed or sent crap.. why. because there are many ways to hide.
mixers are the worse kind because your using a criminal activity to hide in most cases a not so much bad activity.. its like murdering someone to hide the fact you stole a mars bar from a convenience store.. its absolutely stupid to do this.

instead do the smart thing. dont advertise your main stash address publicly. yes talk figuratively and if asked discuss things but dont tell people what type of system you have at home or if your using a hardware wallet a desktop node or a phone litewallet or if you have private key backups stored anywhere.
if your smart enough you can separate your social media/forum activity from your real world employment/business activity and also keep that separate from your family life.

i have been here since 2012 and im still good without needing to resort to using things that will cause red flags.

If you use bitcoin to buy things anyone can see your address and full history of your transactions. Maybe you have no intention to use bitcoin for anything other than holding or trading and that's fine but for people who use bitcoin in real commerce revealing full history is a risk. They take the risk of getting bad bitcoin too. If you make deals in dollars you don't care if this dollar was used to by a drug dealer. You just take it. With bitcoin you need to guard yourself and coinjoin lets you take precautions against unnecessary investigation. Bitcoin is going mainstream and soon, the only bitcoin you will get will be earned and not bought so you'll be getting anything as it goes. And it's not true that only criminals use coinjoin or other mixers. Don't make claims you cannot prove.

[BlackHatCoiner]

i have never needed to use mixers. and for years now i have mentioned having a large stash of bitcoin from the early days, and i have never been blackmailed or sent crap.. why. because there are many ways to hide.

Except that you're provably traced. Believing that you're not traced because you've never been blackmailed shows how little things you know about privacy. There aren't many ways to hide. Transactions are public. There are companies that try to de-anonymize everyone 24/7/365.

mixers are the worse kind because your using a criminal activity to hide in most cases a not so much bad activity..

There's nothing wrong with using a mixer, just as there's nothing wrong to CoinJoin, PayJoin, exchange BTC for XMR etc. Believing that mixing means breaking the law only reveals that you're an anti-privacy, anti-freedom meathead.

as you say your worried about people finding out about your value on social media.. well then stop posting your bitcoin address on it and they will never associate you to any given address.

Which discloses, for once more, how desperately foolish you are when it comes to chain analysis. You don't have to state what's your address to have your privacy invaded. Just make a purchase and the service can trace you from your change.

mixers are a waste of time anyway. imagine you are a innocent guy doing nothing criminal [followed by other nonsense]

You don't have to be a criminal to have something to hide. And you don't need to have something to hide to want privacy. People might want to preserve their privacy, because they have nothing to show as well.

[Ale88]

The thing is that there already are some good enough solutions but too few people use them, so they stand out from the rest of the transactions. People need to become more privacy-oriented. 

I am interested to know why some people just never care.  I am too tired of the 'nothing to hide' argument and need a real reason someone should not worry about being spied on.  Because at the end of the day, most of us are looking for freedoms and democracy and it makes no sense then to accept surveillance.  To me there is a clear, distinctive line between freedom and surveillance.  When surveillance begins, freedom starts to end.  That is how I perceive it.

I understand what you mean and I partially agree with that, I say partially because things in this world changed a lot in the last centuries, today's definition of freedom is different compared to 200 years ago. If people would behave in a better way we wouldn't need surveillance, but there are too many criminals and crazy people out there so yes, personally I'm fine sacrificing part of my privacy in exchange of more security, it doesn't matter if it's about online or real life surveillance.