What is the best way to spend BTC from an Electrum wallet with privacy?

[takuma sato]

For the people that mention Tor with Electrum, I understand that. I mentioned Electrum, because I think it can be used on mobile phone. Privacy wallets can't. So the idea was to coinjoin funds I want to spend, then spend them with Electrum through a phone so I can pay without having to carry a laptop around which is insanely annoying. I need to get the funds first in a phone ready to spend.

If you get paid in BTC address you have on an Electrum wallet, and you want to pay for someone
- snip -

For example, you get paid in address A which has 0.1 BTC

You don't want to disclose you own 0.1 BTC to this person/entity, so you want to spend 200 USD on this good or service, which are like 0.004855 BTC at current rate.

How do you do this?
- snip -

First of all, you should always use a new address for EVERY transaction you receive.

So, if that 0.1 BTC was received as 5 separate payments of:

• 0.0301 BTC
• 0.0039 BTC
• 0.0408 BTC
• 0.0019 BTC
• 0.0233 BTC

Then you can just use the two smallest outputs (0.0301 BTC + 0.0019 BTC = 0.0058 BTC) to fund your transaction. In this way, the entity will see no link at all to the three larger outputs under your control.

Or, if you prefer, you could use just the 0.0233 BTC output to fund the transaction, significantly reducing the visibility from the full 0.1 BTC to just 23% of your balance.

Now, if you have only ever received a single transaction, and the amount of that single transaction was 0.1 BTC, then maintaining privacy of that balance will be more difficult.

If you're willing to pay repeated transaction fees over many days/weeks/months/years to gain some privacy, one thing you could do to increase your privacy a bit would be to generate a random time and then after waiting that amount of time from receiving your initial transaction create a new transaction to split your balance by a random percentage and send each portion to a new addresses in your wallet. Then after another random time, chose one of the two outputs randomly, and split that to 2 new addresses. Then after another random amount of time, chose one of the three outputs in your wallet and split that to 2 new addresses, and so on until you have several random sized outputs all created at random different times from random earlier outputs.  This will make it much more difficult for the entity to distinguish between outputs that you still control.

If you're only trying to maintain privacy from one particular entity, and you don't mind another entity knowing about your larger single UTXO, you could briefly send your 0.1 BTC to a popular entity that pools the bitcoins they receive (such as an exchange or a gambling website). As an example, let's assume you use Coinbase. Then you could withdraw random percentages of the 0.1 BTC, each to a separate address in your wallet. It would become extremely difficult for the entity you are trying to maintain privacy from to determine which of the many, many outputs Coinbase sent were sent to addresses of yours vs. addresses of other people.

Another option might be to use an intermediary (friend?, family?, etc) that you aren't concerned about knowing how much BTC you have in the transaction you received.  You could make an arrangement for the intermediary to make the payment on your behalf, and then later you could send a payment amount to the intermediary at a new address compensating them for helping you.

There are probably more options, but those are the few that come immediately to mind.

Note: if the entity you are trying to maintain privacy from is a government entity, it's possible that some of these processes to hide the source of funds might be considered "money laundering" by some governments. This may be illegal in somme jurisdictions, and you may need to talk to a lawyer to make sure that you're not doing anything that could be charged as a crime.

Requesting a different address is not always an option. For instance, in the example of anyone here recieving payments in exchange of advertising a website through signatures. The managers of these signature campaigns I assume wouldn't want to deal with a different address per payment, so they ask you to keep the same address for the duration of the campaign.

You mentioned Coinbase, not an option since that requires KYC. So a non-kyc exchange or casino that allows for Tor usage would do. But which ones do? This is definitely a better idea than using a mixer tho. Like I said before, you mix your stuff, send it to someone, this someone puts it on an exchange and you may or not have a problem. It should be perfectly legal to use a mixer to not disclose your funds everytime you pay someone, but this is the world we live in now.
If instead, you send the funds you want to use to an exchange that isn't KYC and get them back, you can now use them without putting in trouble the person that you are paying if this person deposits these funds into a KYC exchange.

Intermediaries are not an option.

The payment is a small payment, so im not too worried about things, and it is not some government thing. It's just that if you buy an used item from someone that sells it on a webpage in exchange of BTC for instance, you don't want to tell this person that you own 0.1 BTC, so im looking for the most efficient way to go about things. Perhaps I should have asked this on the other subforum.

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[DarknetMarkets]

For the people that mention Tor with Electrum, I understand that. I mentioned Electrum, because I think it can be used on mobile phone. Privacy wallets can't. So the idea was to coinjoin funds I want to spend, then spend them with Electrum through a phone so I can pay without having to carry a laptop around which is insanely annoying. I need to get the funds first in a phone ready to spend.

If you get paid in BTC address you have on an Electrum wallet, and you want to pay for someone
- snip -

For example, you get paid in address A which has 0.1 BTC

You don't want to disclose you own 0.1 BTC to this person/entity, so you want to spend 200 USD on this good or service, which are like 0.004855 BTC at current rate.

How do you do this?
- snip -

First of all, you should always use a new address for EVERY transaction you receive.

So, if that 0.1 BTC was received as 5 separate payments of:

• 0.0301 BTC
• 0.0039 BTC
• 0.0408 BTC
• 0.0019 BTC
• 0.0233 BTC

Then you can just use the two smallest outputs (0.0301 BTC + 0.0019 BTC = 0.0058 BTC) to fund your transaction. In this way, the entity will see no link at all to the three larger outputs under your control.

Or, if you prefer, you could use just the 0.0233 BTC output to fund the transaction, significantly reducing the visibility from the full 0.1 BTC to just 23% of your balance.

Now, if you have only ever received a single transaction, and the amount of that single transaction was 0.1 BTC, then maintaining privacy of that balance will be more difficult.

If you're willing to pay repeated transaction fees over many days/weeks/months/years to gain some privacy, one thing you could do to increase your privacy a bit would be to generate a random time and then after waiting that amount of time from receiving your initial transaction create a new transaction to split your balance by a random percentage and send each portion to a new addresses in your wallet. Then after another random time, chose one of the two outputs randomly, and split that to 2 new addresses. Then after another random amount of time, chose one of the three outputs in your wallet and split that to 2 new addresses, and so on until you have several random sized outputs all created at random different times from random earlier outputs.  This will make it much more difficult for the entity to distinguish between outputs that you still control.

If you're only trying to maintain privacy from one particular entity, and you don't mind another entity knowing about your larger single UTXO, you could briefly send your 0.1 BTC to a popular entity that pools the bitcoins they receive (such as an exchange or a gambling website). As an example, let's assume you use Coinbase. Then you could withdraw random percentages of the 0.1 BTC, each to a separate address in your wallet. It would become extremely difficult for the entity you are trying to maintain privacy from to determine which of the many, many outputs Coinbase sent were sent to addresses of yours vs. addresses of other people.

Another option might be to use an intermediary (friend?, family?, etc) that you aren't concerned about knowing how much BTC you have in the transaction you received.  You could make an arrangement for the intermediary to make the payment on your behalf, and then later you could send a payment amount to the intermediary at a new address compensating them for helping you.

There are probably more options, but those are the few that come immediately to mind.

Note: if the entity you are trying to maintain privacy from is a government entity, it's possible that some of these processes to hide the source of funds might be considered "money laundering" by some governments. This may be illegal in somme jurisdictions, and you may need to talk to a lawyer to make sure that you're not doing anything that could be charged as a crime.

Requesting a different address is not always an option. For instance, in the example of anyone here recieving payments in exchange of advertising a website through signatures. The managers of these signature campaigns I assume wouldn't want to deal with a different address per payment, so they ask you to keep the same address for the duration of the campaign.

You mentioned Coinbase, not an option since that requires KYC. So a non-kyc exchange or casino that allows for Tor usage would do. But which ones do? This is definitely a better idea than using a mixer tho. Like I said before, you mix your stuff, send it to someone, this someone puts it on an exchange and you may or not have a problem. It should be perfectly legal to use a mixer to not disclose your funds everytime you pay someone, but this is the world we live in now.
If instead, you send the funds you want to use to an exchange that isn't KYC and get them back, you can now use them without putting in trouble the person that you are paying if this person deposits these funds into a KYC exchange.

Intermediaries are not an option.

The payment is a small payment, so im not too worried about things, and it is not some government thing. It's just that if you buy an used item from someone that sells it on a webpage in exchange of BTC for instance, you don't want to tell this person that you own 0.1 BTC, so im looking for the most efficient way to go about things. Perhaps I should have asked this on the other subforum.

I use XChange over Tor, 1% fee and works quick every time:

http://xmxmrjvjw3drvegm7m5gpqp3bsgp3x3bgc2x7jc76cacr74jhdwop7id.onion

[DannyHamilton]

Requesting a different address is not always an option. For instance, in the example of anyone here recieving payments in exchange of advertising a website through signatures.

Don't do that.  Simply refuse to do business with anyone that violates your privacy in such a way. If they can't respect you enough to protect your privacy, why would you want to help them with anything.

The managers of these signature campaigns I assume wouldn't want to deal with a different address per payment, so they ask you to keep the same address for the duration of the campaign.

I would refuse to engage in transactions with someone that was so lazy that they were willing to put my privacy at risk in that way.

You mentioned Coinbase, not an option since that requires KYC.

I specifically said: "If you're only trying to maintain privacy from one particular entity, and you don't mind another entity knowing about your larger single UTXO".

So a non-kyc exchange or casino that allows for Tor usage would do.

If that's what you prefer.

Intermediaries are not an option.

They can be. It depends on the particular situation. Your question was phrased in a way that implied that you were looking for generalized advice for all that might want to know how to better maintain privacy.  If, instead, you have a very specific set of circumstances that are requiring a very specific solution, then you'd need to provide a lot more details to get individualized advice.

The payment is a small payment, so im not too worried about things, and it is not some government thing. It's just that if you buy an used item from someone that sells it on a webpage in exchange of BTC for instance, you don't want to tell this person that you own 0.1 BTC, so im looking for the most efficient way to go about things. Perhaps I should have asked this on the other subforum.

For a small payment, I'd consider using Lightning network. I don't recall though how much the recipient knows about the sender's channel. Maybe I'll look into that this weekend.

If it's a small payment for a used item on a webpage, and it's the seller that you are trying to keep the information from, then why would Coinbase KYC matter?

[PrivacyG]

First of all, you should always use a new address for EVERY transaction you receive.

So, if that 0.1 BTC was received as 5 separate payments of:

• 0.0301 BTC
• 0.0039 BTC
• 0.0408 BTC
• 0.0019 BTC
• 0.0233 BTC

Then you can just use the two smallest outputs (0.0301 BTC + 0.0019 BTC = 0.0058 BTC) to fund your transaction. In this way, the entity will see no link at all to the three larger outputs under your control.

Or, if you prefer, you could use just the 0.0233 BTC output to fund the transaction, significantly reducing the visibility from the full 0.1 BTC to just 23% of your balance.

I know this is the Bitcoin Discussion Board but I feel like writing my input.

Speaking out of personal experience.  If you have multiple people you often send Bitcoin to, after only a few Transactions it becomes really hard to keep track of what is going on.  This is why I use Monero.  It sometimes costs me a lot more than just tracking my Bitcoin Transactions and UTXOs, but after making a few costly mistakes you realize it is worth the cost.

My personal advice for any body willing to maximize their Privacy is use Monero in parallel with Bitcoin.  I use my main Bitcoin Seed for Bitcoin only I know about and I use Monero as an intermediary to avoid linking my personal Bitcoin to the Bitcoin I have to spend.

If I link the two smallest Outputs, 0.0039 plus 0.0019 which is in total 0.0058 but only spend 0.005 out of it to pay OP, I now have an UTXO of 0.0008 labeled 'takuma sato' in my Electrum.  Then I spend 0.02 out of my 0.0301 on drinks and have an UTXO labeled 'liquor store' containing 0.0101 Bitcoin.  Then I decide to finally link my 0.0408 with my 0.0233 to spend 0.06 Bitcoin on a phone.  I now have three UTXOs.

0.0008 Bitcoin 'takuma sato'
0.0101 Bitcoin 'liquor store'
0.0041 Bitcoin 'phone store'

Now I have two options.  First is easiest.  I link the second and third UTXO because I do not care if two stores know I bought something off them.  But that is a Privacy concern to me and I would not want takuma sato to know I purchased any thing from the liquor store or the phone store either.  So what do I do?

First option is I continue to use my UTXOs separately.  I have 0.0149 Bitcoin left but I can not purchase something worth the entire Balance without compromising my Privacy.  If I want to purchase another phone worth 0.01 Bitcoin, I can not without linking UTXOs from the two stores.  Unless I get more Bitcoin and have an unused UTXO that I can use in combination with the UTXO labeled 'phone store'.

So here comes my second option.  Finding a way to remove my identity off the UTXOs I own.  The best way to do it is using Monero as an intermediary.  Exchange UTXOs from Bitcoin to Monero in chunks of each label category at random times in random separate days.  From 0.0149 Bitcoin you exchanged into X Monero.  Now return to Bitcoin and split it into multiple Addresses.  Say three.

Now you own three anonymized UTXOs of approximately 0.005 Bitcoin.  No more labels, no more worries.  Costs a little bit more, but it is the cost of Privacy unfortunately.  For someone as paranoid as me, it is worth the costs.

[Benedictare]

   Electrum is a single coin wallet that approves only Bitcoin,lots one to promote platforms which send and receives Bitcoin for it's fast and easy setup processes ,it is resulting from careful thought an anonymous wallet with privacy features.  It's HD features make people easily restore and backup their wallet ,since a light node ,Electrum ask information from full nodes confirmation which verifies that your transaction are included in the blockchain.

  For you to spend Bitcoin from an Electrum, you have to select the send menu,and copy down the address of your receiver below and write down the description, and put In the amount to be sent and set the fee that will affect how early the receiver will receive his Bitcoin.

[takuma sato]

First of all, you should always use a new address for EVERY transaction you receive.

So, if that 0.1 BTC was received as 5 separate payments of:

• 0.0301 BTC
• 0.0039 BTC
• 0.0408 BTC
• 0.0019 BTC
• 0.0233 BTC

Then you can just use the two smallest outputs (0.0301 BTC + 0.0019 BTC = 0.0058 BTC) to fund your transaction. In this way, the entity will see no link at all to the three larger outputs under your control.

Or, if you prefer, you could use just the 0.0233 BTC output to fund the transaction, significantly reducing the visibility from the full 0.1 BTC to just 23% of your balance.

I know this is the Bitcoin Discussion Board but I feel like writing my input.

Speaking out of personal experience.  If you have multiple people you often send Bitcoin to, after only a few Transactions it becomes really hard to keep track of what is going on.  This is why I use Monero.  It sometimes costs me a lot more than just tracking my Bitcoin Transactions and UTXOs, but after making a few costly mistakes you realize it is worth the cost.

My personal advice for any body willing to maximize their Privacy is use Monero in parallel with Bitcoin.  I use my main Bitcoin Seed for Bitcoin only I know about and I use Monero as an intermediary to avoid linking my personal Bitcoin to the Bitcoin I have to spend.

If I link the two smallest Outputs, 0.0039 plus 0.0019 which is in total 0.0058 but only spend 0.005 out of it to pay OP, I now have an UTXO of 0.0008 labeled 'takuma sato' in my Electrum.  Then I spend 0.02 out of my 0.0301 on drinks and have an UTXO labeled 'liquor store' containing 0.0101 Bitcoin.  Then I decide to finally link my 0.0408 with my 0.0233 to spend 0.06 Bitcoin on a phone.  I now have three UTXOs.

0.0008 Bitcoin 'takuma sato'
0.0101 Bitcoin 'liquor store'
0.0041 Bitcoin 'phone store'

Now I have two options.  First is easiest.  I link the second and third UTXO because I do not care if two stores know I bought something off them.  But that is a Privacy concern to me and I would not want takuma sato to know I purchased any thing from the liquor store or the phone store either.  So what do I do?

First option is I continue to use my UTXOs separately.  I have 0.0149 Bitcoin left but I can not purchase something worth the entire Balance without compromising my Privacy.  If I want to purchase another phone worth 0.01 Bitcoin, I can not without linking UTXOs from the two stores.  Unless I get more Bitcoin and have an unused UTXO that I can use in combination with the UTXO labeled 'phone store'.

So here comes my second option.  Finding a way to remove my identity off the UTXOs I own.  The best way to do it is using Monero as an intermediary.  Exchange UTXOs from Bitcoin to Monero in chunks of each label category at random times in random separate days.  From 0.0149 Bitcoin you exchanged into X Monero.  Now return to Bitcoin and split it into multiple Addresses.  Say three.

Now you own three anonymized UTXOs of approximately 0.005 Bitcoin.  No more labels, no more worries.  Costs a little bit more, but it is the cost of Privacy unfortunately.  For someone as paranoid as me, it is worth the costs.

Yeah, you have to do a lot of work to keep any reasonable privacy, and if you try to sell your coins in a KYC exchange for fiat it will be hell to explain where the funds came from. Just to exercise any reasonable amount of privacy (as in, the same privacy one would have when you are sending a regular bank transfer, that is, sending money without revealing your funds in the process) you get labeled a suspicious individual. This is why I don't see any way to cash out Bitcoin unless you mined it and send it directly to the exchange, or bought it from a KYC exchange and has a ticket. Anything else starts becoming too convoluted.

This also showcases how BTC will never be used at a mainstream level, at least until one can achieve similar level of privacy of a bank transfer (again, not potentially revealing your funds with a transaction) by just clicking a send button. Im not familiar with LN and have no idea how it works but nobody uses it that I know, when someone lists an item or service they usually just have regular bc1 addresses.