Privacy Tips: Don't send round amount

[Little Mouse]

Blockchair has an option to check whether transaction privacy is good or bad. And from that, I learned that sending round amount decrease the privacy of a tx, at least make it almost confirmed and identifiable that round amount is the amount which has been sent to (recipient) and the rest is change address. It makes sense. We are always doing this. We sent round amount most of the times and the rest goes to the change address. Anyone can identify which one is receiver address and which one is change address. If you are concerned about your privacy, this is one of the simple strategy to follow. If you don't send round amount and instead add small amount to the fund you would like to send, it will not be that easy to identify the recipient and change address.

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[Poker Player]

Yes, well, that's good, but I don't get too obsessed either, because, for example, the payments I have received these last weeks from the signature campaign have been 0.003 Bitcoin. In the transaction it is clear who are the recipients and what is the change address. But also, the address where I receive this amount is public.

But well, as a general idea to not leave too many clues when you make transactions and keep your privacy is fine.

[hosseinimr93]

To add to OP:
The other criteria that can be used for identifying the change address and the recipient's address is the script type used for the addresses.
For example, if you make a transaction from a segwit address to a legacy address and the change is sent to a segwit address, the legacy output probably belongs to the recipient and the segwit output is probably the change.

[crwth]

I do notice that every time I have transacted with my wallet it shows that my privacy has "possible sending to self" type of thing. Is it going to be a concern if you have managed to do that but there's no record of you doing it in any website? Like the tx id is not announced and it's just you who knows about that transaction and it's going to be buried in all the transactions for the day right?  

How would one know? Unless it's going to be announced or connected with wallets etc, right?

[Charles-Tim]

The problem is not only about sending small amount, it also applies to the wallet people are using that select addresses to take UTXOs to send, it also applies to wallets not having coin control and address freeze. Anyone that wants privacy this way has to make use of a reputed wallet that have such features.

But the people that truly have privacy while making use of bitcoin are the people that run their own node.

[o_e_l_e_o]

For example, if you make a transaction from a segwit address to a legacy address and the change is sent to a segwit address, the legacy output probably belongs to the recipient and the segwit output is probably the change.

Which, with a little bit of tinkering and a good wallet, can be used to your advantage to obfuscate the change output. If sending to a legacy output as in your example, you can also manually send the change to a legacy output to help hide which is which. Even better if you are sending from segwit to segwit and you still send the change to a legacy (or P2SH) output, as most analyses will then say your change is the payment and the payment is the change.

Is it going to be a concern if you have managed to do that but there's no record of you doing it in any website?

There's a record on every bitcoin node on the planet, and anyone can see it using any of the many blockchain explorers in existence.

How would one know? Unless it's going to be announced or connected with wallets etc, right?

Because there are dozens of blockchain analysis entities which are constantly analyzing the entire blockchain and every transaction which takes places, linking addresses together and linking address groups to individuals and entities.

[crwth]

There's a record on every bitcoin node on the planet, and anyone can see it using any of the many blockchain explorers in existence.

I know that of course, but would someone check it if it's just buck change money? Unless you are transferring tons of BTC, that's a different case.

Because there are dozens of blockchain analysis entities which are constantly analyzing the entire blockchain and every transaction which takes places, linking addresses together and linking address groups to individuals and entities.

So they have automated it already and scouring the internet for possible connections for different types of addresses? I see. That's just how we people are. We really need to be careful or something. So the goal is not to be investigated by them or prevent possible invasion of privacy, right?

[Despairo]

I know that of course, but would someone check it if it's just buck change money? Unless you are transferring tons of BTC, that's a different case.

It's not only about huge amount only, but chainalysis and other blockchain analysis are working to recognize the Bitcoin owner regardless the amount. They want to track the whole Bitcoin holders and if possible, they will freeze the amount if it's linked to centralized entity.

There's few other things that will decrease our privacy aside from send round amount Bitcoin:
1. Send the whole Bitcoin balance to one address.
2. Receive and send Bitcoin regularly at the same pattern (e.g. every 3 days, week, etc).

[tranthidung]

Blockchair has an option to check whether transaction privacy is good or bad.

Not only Blockchair.com explorer has that feature, others have, such as blockstream.info.

When you check 'your' transaction privacy, use Tor. If you don't use Tor, you self-break your transaction privacy.

And from that, I learned that sending round amount decrease the privacy of a tx, at least make it almost confirmed and identifiable that round amount is the amount which has been sent to (recipient) and the rest is change address. It makes sense.

Yes it makes sense. In addition, always use change address is another good advice.

However, if you don't use round amount but later consolidate leftovers into one transaction, it is a bad practice.

[LoyceV]

Blockchair has an option to check whether transaction privacy is good or bad.

Don't believe Blockchair's privacy score, it's terrible. This transaction for example has "Privacy 95 High", while it's the exact same thing every week.

We sent round amount most of the times and the rest goes to the change address.

I sometimes do the opposite: send a round amount to my own change address, and a "weird" amount to the address I'm paying to. Using disinformation for privacy
You can do the same with fees: change what you pay depending on the transaction speed you need.

For example, if you make a transaction from a segwit address to a legacy address and the change is sent to a segwit address, the legacy output probably belongs to the recipient and the segwit output is probably the change.

That's a good one to manually adjust too, but you'll risk paying more in fees later. Luckily, most services nowadays use native Segwit so all inputs and outputs can have that format.

[Mr.right85]

I hope you guys don't think I should have been above this but, when it comes to matters of security and privacy, I'm often interested and hope to understand in order to be a little safer than safe.

I have been going through this thread just now and most of the replies that comes in. My confusion right now is, why is this """Change Address""" about? I've done some transactions for sure but, haven't taken one of this or maybe just didn't understand or gave it any importance so,

What is it really about (Change Address)?
And why does it matter as per issues of security and privacy?

[Welsh]

Don't believe Blockchair's privacy score, it's terrible. This transaction for example has "Privacy 95 High", while it's the exact same thing every week.

Seems to me like it's added fluff to give its users the impression that they're a step ahead of the competition, without it actually meaning anything at all. Probably, a loosely implemented feature without any meaningful criteria.

I've noticed that Blockchair has a tonne of advertising they like to do, so that's probably why they've implemented something like this, since users will think it's a handy feature without actually knowing what determines it.

Based on the information you've provided at least, that's the impression I get. Although, I generally quite like the platform compared to some others.

[tranthidung]

What is it really about (Change Address)?
And why does it matter as per issues of security and privacy?

What is the "Change" address on bitcoin wallet ? read to know !

It starts with choosing a good wallet to use. A good wallet is non custodial that gives you private key and full control of keys and coins as well as Coin Control feature. With Coin control feature, you will be able to use Change address or not but the default setting should be "Yes".

Some platforms allow you to use Change address too but they provide you non custodial wallet.

[aysg76]

Yes, well, that's good, but I don't get too obsessed either, because, for example, the payments I have received these last weeks from the signature campaign have been 0.003 Bitcoin. In the transaction it is clear who are the recipients and what is the change address. But also, the address where I receive this amount is public.

Yeah this is the case in most of transactions in which privacy is not focused upon and you could see the recipient address and change address easily on these explorers but if you can try to improve your privacy with the necessary steps.All the records are traceable but it depends on us how we improve our security like using mixers while making transactions and being not traceable.

Seems to me like it's added fluff to give its users the impression that they're a step ahead of the competition, without it actually meaning anything at all. Probably, a loosely implemented feature without any meaningful criteria.

I also think this feature is loosely implemented because they have set the different bars like

Code:

 0 - Critical
1-49 - Low 
50-89 - Moderate
90-99 - High 
100 - Healthy 

They provide the little explanation of how they categorised this privacy meter by saying with 100+ metrics but didn't give explanation on it and users would see the score under the transactions but how come they have that score will not be public and can say we don't need to trust them blindly and scores can differentiate a lot for these transactions.

I've noticed that Blockchair has a tonne of advertising they like to do, so that's probably why they've implemented something like this, since users will think it's a handy feature without actually knowing what determines it.

A possible explanation why they came up with this feature to attract more users to their platform and there were introduction of this on many articles and twitter also a source to advertise your platform but as user it depends on us how we determine our privacy and should be used in much effective manner rather then completely believing on these platforms although they provide a lot information on other things.

Don't believe Blockchair's privacy score, it's terrible. This transaction for example has "Privacy 95 High", while it's the exact same thing every week.

And this one has 0 level of privacy score so can't say anything about surety with them.

[Mr.right85]

Thanks tranthidung, it was thus helpful, haven't gone through the thread (What is the "Change" address on bitcoin wallet ? read to know !) you provided and am of course on course. Thanks to this response:

In this transaction, the total payment made was 10 BTC and the total balance was 10.89 BTC. So the Bitcoin wallet cannot just take out 10 BTC out of 10.89 BTC thus the whole 10.89 BTC is spent in two transactions.

But a thing to note here is:

One transaction of 10 BTC goes to one address (recipient), and another 0.89 BTC goes to another address which the spender of 10.89 BTC controls and this is the change address. And your wallet will have the private keys of the change address so that you can again spend the 0.89 BTC change that you have received.

So effectively now the 10.89 BTC is spent in its entirety and destroyed hence preventing double usage or double spending of the same bitcoins.


Source

From the above thread which offered more clarification to the topic of discussion and i find it relevant for other newbies that might be following up this thread.

Although, a few more of my questions remains unanswered and would be checking as well to what response I would get. I quote it right here again...

What is it really about (Change Address)?
And why does it matter as per issues of security and privacy?

What is the "Change" address on bitcoin wallet ? read to know !

As the referred thread don't really carry issues pertaining to its relevance with respect to security and privacy. Any help?

[hosseinimr93]

As the referred thread don't really carry issues pertaining to its relevance with respect to security and privacy. Any help?

I think The Cryptovator has answered your first question in the topic shared by tranthidung well.

Assume that you have a 100 dollar bill and you want buy something which is worth 50 dollars.
You give your 100 dollar bill to the seller and get a 50 dollar bill. Bitcoin works in the same way. If you have an UTXO worth 0.1 BTC and want to pay someone 0.05 BTC, you make a transaction with your 0.1 BTC. Your transaction will have two outputs. The one will go to the recipient and the remaning amount which is called change is sent back to you.

Now let's go to your second question.
Assume that you want to have 0.1 BTC and wants to pay someone 0.6 BTC. Your transaction will have two outputs. One of them will be 0.6 BTC which goes to the recipient and the change will be 0.4 BTC minus transaction fee.
If the change address is same as the sending address, everyone can know which of outputs is the change and which one is owned by the recipient.  In this way, you may hurt your privacy.
With using a different address as your change address and choosing the outputs amounts in the way no one can know which of them is the change, you can improve your privacy

[Little Mouse]

Probably, a loosely implemented feature without any meaningful criteria.

Actually they have some criteria to identify and score a transaction based on their criteria. Though these are basic and very much likely to get a wrong score (as shown by LoyceV), I think following their criteria would definitely give you some extra benefit for your privacy.

They have 100+ indicators to score a transaction. You can check all of them here- https://blockchair.com/api/docs#link_M6
These are basics but of course first step toward privacy. Anyway, I'm not vouching for them lol.

[pooya87]

It is worth mentioning that whenever you check your address or transactions in a block explorer you are associating a lot of meta data with your coins. Keep in mind that these centralized services are storing cookies on your computer (in the browser) and see your IP address and your system fingerprint. There is no reason to think they aren't storing all that.

[o_e_l_e_o]

1. Send the whole Bitcoin balance to one address.

Well, this depends. If you are consolidating multiple outputs in to one, then yes, this is bad for your privacy. But if you are sending the entirety of a single output from one address to another, this can be very good for your privacy since you avoid creating any change at all. An outside observer can't tell if you've paid someone or just moved all the coins to another address you own.

That's a good one to manually adjust too, but you'll risk paying more in fees later. Luckily, most services nowadays use native Segwit so all inputs and outputs can have that format.

If paying from a native segwit address to a legacy address, then you've got the option of sending the change to either a nested segwit or now a taproot address instead, which will achieve the same result of confusing any blockchain analysis while only incurring a very minor future fee increase.

Probably, a loosely implemented feature without any meaningful criteria.

The criteria they use are actually very well defined: https://blockchair.com/api/docs#link_M6. Knowing what they are makes it very easy to figure out how to fool them, although there is of course no guarantee that blockchain analysis companies are using similar criteria.

[Pmalek]

A lot of the services and goods you pay for have a fixed value in USD, EURO, or some other fiat. So the amounts you send won't be round, and depending on how you earn your bitcoins, the UTXOs in your wallet aren't round either. Let's take signature payments as an example. You are mostly paid in a fixed USD amount converted to BTC. Therefore, it's unlikely that you will receive exactly 0.01 BTC. Getting 0.00991 BTC or 0.010005 BTC is more likely. And then if you are paying someone for some services, it's again usually a fiat amount converted to BTC. 0.00246792 BTC is $50 right now. Nothing round about that.