Bitcoin Privacy & Address reuse

[o_e_l_e_o]

Having to send them in batches would in no particular order and possibly not all at once would help but, aren’t they still getting into the same address? I get the idea that the dots could still be connected some how from the sun up value though, it still gives that extra stress to deduce.

Well, the whole point would be to withdraw in batches of different amounts at different times to different addresses. And since OP says his watch only wallet is synced via his own personal Electrum server and bitcoin node, then there is no risk of a malicious Electrum server linking the addresses in his wallet together via his IP address querying all the addresses at once.

If he withdrew everything to the same address then doing so in batches provides no additional privacy over doing so in a single transaction - anyone can simply sum up all the withdrawals and then try to match input and outputs amounts.

[1714992120]

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[1714992120]

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[BenCodie]

Hello.

I have a multisig vault. In order to achieve the highest privacy:

1. I generate an address per incoming transaction.
2. My wallet (co-signers) has been created using airgapped devices.
3. I have imported my xpubs to my personal electrum server on my node.

But, I have sent some coins from addresses to which I had originally sent directly from Binance.

Have I lost all of my privacy because of this mistake?

Please feel free to let me know whether you  think that I exaggerate. I am not a privacy maniac. I just want to know the best practices.

Yes, spending coins from Binance and/or mixing them in with your other coins invalidates any privacy measures that you previously previously took. If any inputs aren't mixed together, maybe they are okay...though it also depends on your wallet and the level of logs that the node you are connected to is taking edit - Credits to you for using your own electrum server and Bitcoin node! You should be fine for the inputs that you don't mix with your binance inputs.

It should be noted too that even if you didn't use Binance, the moment that you start spending yours coins, you will likely join the inputs if you aren't using coin/input control (as without this, inputs will join to make your transaction)...and if you aren't using a P2P marketplace for liquidating, coin privacy measures are likely redundant anyway.

From a security standpoint, you have a great setup. It would be extremely difficult for anyone to hack your wallet.

[apogio]

Having to send them in batches would in no particular order and possibly not all at once would help but, aren’t they still getting into the same address? I get the idea that the dots could still be connected some how from the sun up value though, it still gives that extra stress to deduce.

Well, the whole point would be to withdraw in batches of different amounts at different times to different addresses. And since OP says his watch only wallet is synced via his own personal Electrum server and bitcoin node, then there is no risk of a malicious Electrum server linking the addresses in his wallet together via his IP address querying all the addresses at once.

If he withdrew everything to the same address then doing so in batches provides no additional privacy over doing so in a single transaction - anyone can simply sum up all the withdrawals and then try to match input and outputs amounts.

To both @o_e_l_e_o and @Smartvirus.

In my opinion sending in batches is better.

In fact, I started getting familiar with Jam. I don't know if you have heard of it. It is an app that I run on my node through tor. It allows you to send BTC and do the whole mixing stuff. Seems good, have you checked it?

Yes, spending coins from Binance and/or mixing them in with your other coins invalidates any privacy measures that you previously previously took. If any inputs aren't mixed together, maybe they are okay...though it also depends on your wallet and the level of logs that the node you are connected to is taking edit - Credits to you for using your own electrum server and Bitcoin node! You should be fine for the inputs that you don't mix with your binance inputs.

It should be noted too that even if you didn't use Binance, the moment that you start spending yours coins, you will likely join the inputs if you aren't using coin/input control (as without this, inputs will join to make your transaction)...and if you aren't using a P2P marketplace for liquidating, coin privacy measures are likely redundant anyway.

From a security standpoint, you have a great setup. It would be extremely difficult for anyone to hack your wallet.

Hi! thanks.

Unfortunately half of my sats come from centralised exchanges.

[o_e_l_e_o]

In fact, I started getting familiar with Jam. I don't know if you have heard of it. It is an app that I run on my node through tor. It allows you to send BTC and do the whole mixing stuff. Seems good, have you checked it?

I am aware of it and have heard lots of good things, but I haven't used it myself so cannot vouch for it directly. It's effectively a GUI for JoinMarket though, which I do use frequently. Of all the coinjoin implementations, JoinMarket is the best, so it seems like a good choice for what you are looking for.

I'd be interested to hear your thoughts on Jam once you've used it a bit. It remains on my ever growing list of "interesting things to look at more than I have the time".

[Spinflight]

Having to send them in batches would in no particular order and possibly not all at once would help but, aren’t they still getting into the same address? I get the idea that the dots could still be connected some how from the sun up value though, it still gives that extra stress to deduce.

Well, the whole point would be to withdraw in batches of different amounts at different times to different addresses. And since OP says his watch only wallet is synced via his own personal Electrum server and bitcoin node, then there is no risk of a malicious Electrum server linking the addresses in his wallet together via his IP address querying all the addresses at once.

If he withdrew everything to the same address then doing so in batches provides no additional privacy over doing so in a single transaction - anyone can simply sum up all the withdrawals and then try to match input and outputs amounts.

To both @o_e_l_e_o and @Smartvirus.

In my opinion sending in batches is better.

In fact, I started getting familiar with Jam. I don't know if you have heard of it. It is an app that I run on my node through tor. It allows you to send BTC and do the whole mixing stuff. Seems good, have you checked it?

Yes, spending coins from Binance and/or mixing them in with your other coins invalidates any privacy measures that you previously previously took. If any inputs aren't mixed together, maybe they are okay...though it also depends on your wallet and the level of logs that the node you are connected to is taking edit - Credits to you for using your own electrum server and Bitcoin node! You should be fine for the inputs that you don't mix with your binance inputs.

It should be noted too that even if you didn't use Binance, the moment that you start spending yours coins, you will likely join the inputs if you aren't using coin/input control (as without this, inputs will join to make your transaction)...and if you aren't using a P2P marketplace for liquidating, coin privacy measures are likely redundant anyway.

From a security standpoint, you have a great setup. It would be extremely difficult for anyone to hack your wallet.

Hi! thanks.

Unfortunately half of my sats come from centralised exchanges.

 Railgun could help here.

 Bridge to Polygon through wBTC. Deposit into Railgun. Depending upon the amounts you are anonymising you may need to privately swap your wBTC for other coins which have better anonymity sets. Wait for other transactions to create the volume to mask your own. Withdraw into a fresh Polygon wallet, or several wallets if you swapped into other coins. Swap back into wBTC. Bridge back to a fresh wallet on bitcoin.

 Therefore so long as you are careful about anonymity sets and timings there is nothing to link your new bitcoin wallet to your old one. The BTc to deposit to the wBTC bridge will likely not be the same you receive, track mints and burns if you need surety. Fees would be 0.5% for the first scenario and 1% for the latter. Though you could add further swaps from within Railgun depending upon your estimation of the privacy set required.

[o_e_l_e_o]

-snip-

If you are happy to swap bitcoin in to another coin, then there is no reason not to use monero. You don't need to deposit your bitcoin in to some custodian's wallet, you don't need to deal with centralized tokens and IOUs, and you don't need to use things like wBTC which are not private at all and easily traced. Just swap to monero, move the monero around, and then use a different service to swap back in different amounts. Far easier and far better privacy than anything you can do with wBTC.

[m2017]

To have privacy, first mix the coin you sent from Binance using a mixer or coinjoin before sending it to your full client wallet address. Mixing it will make it easy for you.

Or you can first convert it to a privacy coin like monero on a decentralized exchange and then convert it back to bitcoin.

Do not reuse address.

If convert to private coins, like XMR on centralized exchanges, like Binance? Don't be quick to criticize. It is important for us to break the chain of connections, right. Withdraw this XMR from the exchange to a desktop wallet1, create another wallet2. From wallet1 send to wallet2. At this stage, the coins disappeared. Create a new account at the Binance (so that there is no connection with the old account) or any other centralized exchange (of course, without KYC and other verification). Send XMR here, exchange it to BTC and safely withdraw to your desktop wallet, like electrum.

I understand that this option has a lot of extra steps, but still, it can be applied. Is not it?

Hello.

I have a multisig vault. In order to achieve the highest privacy:

1. I generate an address per incoming transaction.
2. My wallet (co-signers) has been created using airgapped devices.
3. I have imported my xpubs to my personal electrum server on my node.

But, I have sent some coins from addresses to which I had originally sent directly from Binance.

Have I lost all of my privacy because of this mistake?

Please feel free to let me know whether you  think that I exaggerate. I am not a privacy maniac. I just want to know the best practices.e

The connection between those addresses can now be established, but will it be possible to associate those addresses with you? If you are not verified in the Binance through KYC, then I suppose this is not a cause for concern. Ideally, there would be no connection between addresses at all if you wish to maintain your privacy.

[o_e_l_e_o]

I understand that this option has a lot of extra steps, but still, it can be applied. Is not it?

If you substitute Binance for peer to peer trading via somewhere like Bisq or Agoradesk, then yes, you can apply this method.

There is exactly zero point in trying to obtain any shred of privacy while using Binance. Even if you don't complete KYC, they are tracking everything from your IP address to your browser fingerprint and paying multiple blockchain analysis firms to trace your deposits and withdrawals.

[BenCodie]

-snip-

If you are happy to swap bitcoin in to another coin, then there is no reason not to use monero. You don't need to deposit your bitcoin in to some custodian's wallet, you don't need to deal with centralized tokens and IOUs, and you don't need to use things like wBTC which are not private at all and easily traced. Just swap to monero, move the monero around, and then use a different service to swap back in different amounts. Far easier and far better privacy than anything you can do with wBTC.

This is correct. However, Spinflight's solution is still a good one if one has doubts in Monero for whatever reason. The fee would be roughly the same, depending on the exchange method that you are using. Both solutions are valid ones though.

In terms of wBTC not being private - that's right, however the solution provided by Spinflight allows you to mask origins by burning/minting different amounts at different times and points, thus making it extremely difficult to track it down. As effective as monero? I couldn't say for sure, though both methods seem to be effective for privacy in their own ways. If someone is determined, using both methods might be a way to increase effectiveness as well.

[o_e_l_e_o]

However, Spinflight's solution is still a good one if one has doubts in Monero for whatever reason.

Monero is the only coin which is truly private and which blockchain analysis firms have been entirely unable to break. If you have doubts about the privacy provided from monero, then it would be absolutely insane to think you would somehow get better privacy from wBTC or similar.

[BenCodie]

However, Spinflight's solution is still a good one if one has doubts in Monero for whatever reason.

Monero is the only coin which is truly private and which blockchain analysis firms have been entirely unable to break. If you have doubts about the privacy provided from monero, then it would be absolutely insane to think you would somehow get better privacy from wBTC or similar.

I'm definitely not refuting what you are saying - though to play devils advocate, I'll say that things that are unbreakable are, until they aren't. Some people have their doubts and try other solutions, that is normal and fine. (again, not refuting that monero is truly private or that analysis firms can't break it).

Achieving privacy is also somewhat static. You either achieve it, or you don't. You don't "get some" or a degree of privacy. If it's not an adequate measure, ultimately it's not private. Monero is not the singular key to privacy. There are definitely other, unique ways in which you can achieve privacy. I believe that Spinflight's solution is possibly one of them, I can't say for sure as I haven't given it a try though in theory I do see Spinflight's logic/rationale behind the theory.

[Spinflight]

However, Spinflight's solution is still a good one if one has doubts in Monero for whatever reason.

Monero is the only coin which is truly private and which blockchain analysis firms have been entirely unable to break. If you have doubts about the privacy provided from monero, then it would be absolutely insane to think you would somehow get better privacy from wBTC or similar.

Hmmm... Is there a bridge between Monero and bitcoin? If so that what is the volume, average transaction size etc? If not are you talking about going via a dodgy CEX? Can't say I know as I've never used that method, though true knowledge of privacy sets and timings isn't limited to the coin or token in question, as much or more information can be gleaned from the bridge or exchange.

 So if you want maximal privacy then you can chain the railgun deployments. Bridge to Ethereum, deposit and use the largest privacy sets there, then take those tokens and bridge them to polygon taking advantage of what is effectively compound interest of diminishing returns, privacy sets squared. When you then bridge back it's guaranteed that there is no heuristically feasible way to track and no connection between the original coins locked on the bridge and those returned.

 This might sound expensive... Though frankly would still be cheaper ( 1-2% in fees plus gas) for the vast majority of token amounts than any other method.

[BenCodie]

However, Spinflight's solution is still a good one if one has doubts in Monero for whatever reason.

Monero is the only coin which is truly private and which blockchain analysis firms have been entirely unable to break. If you have doubts about the privacy provided from monero, then it would be absolutely insane to think you would somehow get better privacy from wBTC or similar.

Hmmm... Is there a bridge between Monero and bitcoin? If so that what is the volume, average transaction size etc? If not are you talking about going via a dodgy CEX? Can't say I know as I've never used that method, though true knowledge of privacy sets and timings isn't limited to the coin or token in question, as much or more information can be gleaned from the bridge or exchange.

 So if you want maximal privacy then you can chain the railgun deployments. Bridge to Ethereum, deposit and use the largest privacy sets there, then take those tokens and bridge them to polygon taking advantage of what is effectively compound interest of diminishing returns, privacy sets squared. When you then bridge back it's guaranteed that there is no heuristically feasible way to track and no connection between the original coins locked on the bridge and those returned.

 This might sound expensive... Though frankly would still be cheaper ( 1-2% in fees plus gas) for the vast majority of token amounts than any other method.

There is, but the rates are terrible.

There are some services which aim to either enhance decentralization or utilize peer to peer functionality. Agoradesk, trocador, hodlhodl, are some peer to peer or reduced centralization services. Bisq is decentralized. In terms of fees, around 1.5-3% after network fees after all is done. So in terms.of cost efficiency, the railgun method is a little.more cost efficient or on par in comparison' and probably with increased decentralization.

[Spinflight]

However, Spinflight's solution is still a good one if one has doubts in Monero for whatever reason.

Monero is the only coin which is truly private and which blockchain analysis firms have been entirely unable to break. If you have doubts about the privacy provided from monero, then it would be absolutely insane to think you would somehow get better privacy from wBTC or similar.

Hmmm... Is there a bridge between Monero and bitcoin? If so that what is the volume, average transaction size etc? If not are you talking about going via a dodgy CEX? Can't say I know as I've never used that method, though true knowledge of privacy sets and timings isn't limited to the coin or token in question, as much or more information can be gleaned from the bridge or exchange.

 So if you want maximal privacy then you can chain the railgun deployments. Bridge to Ethereum, deposit and use the largest privacy sets there, then take those tokens and bridge them to polygon taking advantage of what is effectively compound interest of diminishing returns, privacy sets squared. When you then bridge back it's guaranteed that there is no heuristically feasible way to track and no connection between the original coins locked on the bridge and those returned.

 This might sound expensive... Though frankly would still be cheaper ( 1-2% in fees plus gas) for the vast majority of token amounts than any other method.

There is, but the rates are terrible.

There are some services which aim to either enhance decentralization or utilize peer to peer functionality. Agoradesk, trocador, hodlhodl, are some peer to peer or reduced centralization services. Bisq is decentralized. In terms of fees, around 1.5-3% after network fees after all is done. So in terms.of cost efficiency, the railgun method is a little.more cost efficient or on par in comparison' and probably with increased decentralization.

 Are the volumes at least reasonable?

 I can more than understand most bitcoin mixers seeing protocols which provide similar services on other chains as competitors.

 On chain privacy however is not a zero sum game where one solution wins at the expense of others, all methods have some merit and utility.

 Indeed one of the concerns about bitcoin mixers is that a user might get rid of their ( for whatever reason) tainted bitcoin, merely to receive some proportion of someone else's possibly more tainted back. I'm not sure whether this is a valid concern as I haven't looked into the mechanics behind these mixers too much.

 Curiously the method I've outlined above should, on the face of it, be of most interest to bitcoin mixers themselves who are seeking to provide the best service possible for their customers. Deposit on one bridge and withdraw completely different coins on another. Other ways may be possible.

[o_e_l_e_o]

There is, but the rates are terrible.

On Bisq right now the spread between buy and sell orders for the BTC/XMR pair is 163 sats, which is less than 0.03%. The trading fee for a taker is 0.575%, and the trading fee for a maker only 0.075%.

Are the volumes at least reasonable?

Within a 1% price spread on Bisq, there is approximately 0.6 BTC of volume for selling XMR, but about 14 BTC of volume for buying XMR. This is only one platform, however, and there are plenty of others you can choose from. https://kycnot.me/

Indeed one of the concerns about bitcoin mixers is that a user might get rid of their ( for whatever reason) tainted bitcoin, merely to receive some proportion of someone else's possibly more tainted back.

This is just as much a risk with the methods we are discussing here. The correct approach to this issue is to never use any centralized exchange or service which attacks the fungibility of bitcoin by buying in to the provable nonsense of "tainted" coins.

[BlackHatCoiner]

I am aware of it and have heard lots of good things, but I haven't used it myself so cannot vouch for it directly.

I'm using that instead, although with not big amounts as it's beta software. It supports almost every feature JoinMarket does, even though I have noticed a bug or two. Specifically, in Fee Limits, Jam is reading from the JM's configuration file, but when you attempt to set a base fee and restart both JoinMarket and Jam, it defaults base fee to some value as if it wasn't changed. You should better change that value from the configuration file directly.

I think that unless suggested by AdamISZ, kristapsk, undeath or some other top contributor from JoinMarket, we shouldn't be using Jam confidently. (though some of those do have contributed to Jam)

[Spinflight]

There is, but the rates are terrible.

On Bisq right now the spread between buy and sell orders for the BTC/XMR pair is 163 sats, which is less than 0.03%. The trading fee for a taker is 0.575%, and the trading fee for a maker only 0.075%.

Are the volumes at least reasonable?

Within a 1% price spread on Bisq, there is approximately 0.6 BTC of volume for selling XMR, but about 14 BTC of volume for buying XMR. This is only one platform, however, and there are plenty of others you can choose from. https://kycnot.me/

Indeed one of the concerns about bitcoin mixers is that a user might get rid of their ( for whatever reason) tainted bitcoin, merely to receive some proportion of someone else's possibly more tainted back.

This is just as much a risk with the methods we are discussing here. The correct approach to this issue is to never use any centralized exchange or service which attacks the fungibility of bitcoin by buying in to the provable nonsense of "tainted" coins.

 The whole premise of the thread is tainted bitcoin... OP believes, correctly, that through use of a CEX he has lost his anonymity.

 Your own example here seems to cost about 3% at least for the round trip and only a handful of transactions in the last week.

 Indeed Monero's privacy features play no part in anonymizing theoretical bitcoin here, you'd have been better trading for any other pair with higher volumes. Just because you are swapping for magic beans it doesn't mean the exchange transactions are private you know. Merely the action of sending btc to a known bisq vendor with no resultant transaction in return flags an XMR buy up, I'd warrant.

 Low volume exchanges with few transactions and high costs are not a good solution here.
 

[BlackHatCoiner]

Merely the action of sending btc to a known bisq vendor with no resultant transaction in return flags an XMR buy up, I'd warrant.

But you don't want to hide the fact you're buying XMR (even though I don't see how it's easy to figure out that part unless the seller is a surveilling entity). Just as with bitcoin mixing, you pretty much want from the rest to know you're mixing. You just don't want them to know which are the coins you're receiving from the other end. When coinjoining, you want to give a sign that the rest of the coins aren't in your possession, but you're part of a coinjoin; what you don't want them know is which are the new coins you own. 

Low volume exchanges with few transactions and high costs are not a good solution here.

But when buying XMR, you enter a very high volume market; Monero's. Sure, Bisq isn't a large one, but any XMR user could have chosen to sell their XMR, I don't see why it has to be one who's traded in Bisq before. Ultimately, you can sell XMR for BTC outside Bisq.

[o_e_l_e_o]

The whole premise of the thread is tainted bitcoin... OP believes, correctly, that through use of a CEX he has lost his anonymity.

Sure, but KYCed bitcoin and tainted bitcoin are two entirely separate things.

Your own example here seems to cost about 3% at least for the round trip and only a handful of transactions in the last week.

Not sure how you reached that number. Given maker fees of 0.075%, then I can set my own spreads and pay combined transaction and network fees of <0.5% all in, provided I am not in a rush.

Indeed Monero's privacy features play no part in anonymizing theoretical bitcoin here, you'd have been better trading for any other pair with higher volumes.

Swapping for any other coin which is completely traceable is completely pointless.

Merely the action of sending btc to a known bisq vendor with no resultant transaction in return flags an XMR buy up, I'd warrant.

So? So blockchain analysis knows I sold my KYCed bitcoin for monero. Then what? They can't trace that monero, so they can't pinpoint when I trade it back in bitcoin.

[apogio]

In fact, I started getting familiar with Jam. I don't know if you have heard of it. It is an app that I run on my node through tor. It allows you to send BTC and do the whole mixing stuff. Seems good, have you checked it?

I am aware of it and have heard lots of good things, but I haven't used it myself so cannot vouch for it directly. It's effectively a GUI for JoinMarket though, which I do use frequently. Of all the coinjoin implementations, JoinMarket is the best, so it seems like a good choice for what you are looking for.

I'd be interested to hear your thoughts on Jam once you've used it a bit. It remains on my ever growing list of "interesting things to look at more than I have the time".

Hey. So I have been experimenting with 2 mixers in the past 3-4 days.

I have created a BIP39 wallet in Sparrow where I have sent my UTXOs from my multisig vault. There, I have done 2 mixes and I have generated some new UTXOs. (I also have some coins in badbank which is the amount of coins that wasn't mixed - which I don't touch for the time being).

Then, I sent my freshly mixed UTXOs to Jam (which is a nice GUI for JoinMarket). I have done 5 mixes with 9 collaborators each.

Finally I have created a new vault and I plan to send my UTXOs there. I will use the auto-sweep feature which allows me to "Execute multiple transactions using random amounts and time intervals to increase the privacy of yourself and others. Every scheduled transaction is a collaborative transaction.". This will mix my coins even more.

As a sidenote, I run my own electrum server and Sparrow is connected to it over TOR. At the same time, I also run my own instance of Jam.

I assume this is more than enough, to secure my coins privacy-wise, isn't it?