Question about bitcoin transaction privacy

[hd49728]

You become a target, and this is why you should never share anything about your personal financial information online.

First approach.

• Sim-attack

About it
[BEWARE] Sim Port Attack.
SIM swap attacks.

About risk of other scam methods if people lose their privacy.
https://www.chainsec.io/scams

But why would you do that if you have the seed phrase? I think most modern wallets support them, BTC or not. You only need to store the seed phrase and you can generate multiple addresses easily. Unless I misunderstood what you're saying here, there's no big hurdle to use multiple addresses from the same wallet (especially if the user is careful with coin control and whatnot. CMIIW.

With a small fund, I am ok with using one wallet and multiple addresses in that wallet but if it is a big fund, I would like to split my big fund into different addresses created in different wallets.

Reasons for the practice are
- I don't want to lose all my big fund if one wallet compromised.
- I don't want to lose my privacy through transactions and addresses in one wallet if somehow in the future I make mistakes with coin selection for my transactions.

[OsaiEmma]

Let’s say my private keys are well protected. I use a cold wallet with a passphrase, and I keep my seed phrase somewhere safe. So, from a security point of view, my Bitcoin should be secure.

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

Well, if you're really security conscious and big on privacy, it will most likely not affect you in any way -- unless, there is a wallet compromise like we had with coldcard. And besides, your wallet is not like the most valuable wallet out there, right? There are so many wallets out there, the likelihood of yours being singled out and watched is very low unless it is a very busy wallet that has caught the attention of hackers or bad players.

But, if you're not that conscious about privacy, as most commenters have stated, they can most likely connect your Bitcoin address to you; thus, can know exactly how much Bitcoin you have across your different wallets.

Yea creating multiple addresses could be another strategy in securing your coins.

Even here in the forum, they can link multiple addresses to someone -- and I believe they don't apply professional, sophisticated tools for this -- now imagine someone doing this professionally, employing professional means. I don't think multiple accounts can save you, unless you use mixers; it can all be linked if your identity is exposed.

[retreat]

Let’s say my private keys are well protected. I use a cold wallet with a passphrase, and I keep my seed phrase somewhere safe. So, from a security point of view, my Bitcoin should be secure.

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

Blockchain doesn't store any information about your identity or anything related to personal information that could directly link the address to you. The only thing you need to watch out for is making sure there are no transactions that someone else could use to identify your address and connect it to your identity.

For example, if you withdraw Bitcoin from an exchange to that address, that has already created a link between that address and your identity, or when you use that address to make a payment to a merchant who has your personal information. The point is that you only need to avoid any transaction that can link your address and your identity. Other users have already told you how to avoid it, and you should already understand it.

[Outhue]

Let’s say my private keys are well protected. I use a cold wallet with a passphrase, and I keep my seed phrase somewhere safe. So, from a security point of view, my Bitcoin should be secure.

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

There are many bitcoin address that has so many bitcoin in them, you can easily see them using BTC explorer but there is no way to target such people because all you have is the Bitcoin address and yes they can be public, if addresses are meant to be private how will you share them with friends or businesses to receive or send funds?

The problem can only start when an information is leaked, and the information revealed more than the Bitcoin wallet address, like home address, phone number or email address, still indirectly but this will open the way for scammers to target you better, they will start sending you bad links hoping you click on them, through email and ven your phone number. They knew your worth and you have become a perfect target for them.

[coinlary]

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

Your bitcoin address isn't link to an identity but someone can try as much as possible to get your identity by tracking those transactions.  

Let's use this forum as example, if you receive some Satoshis directly on the froum, and you eventually or already made some mistake by revealing or indirectly revealing of your identity, anyone tracking the address here  can easily connect it to the identity leaked .

If CEXs are your thing and you're making direct deposits, the CEX you're depositing to can easily connect your identity to any transactions received in your account. They can use that information whenever necessary even if not voluntarily, for example, in the event of a hack.

[Zaguru12]

Blockchain analytics company like Chainalysis, Elliptic, etc able to identify who the address belongs to by simply looking at the source of fund and destination of fund.

It's not that hard for these company to trace address ownership unless you are using pure P2P for both off ramp and on ramp which not many could do.

Many of us here use KYC'd exchange and can easily be traced.

For hackers, it will be hard, but it's not impossible because KYC'd exchange have been having data breaches for quite sometime.

Yes blockchain analytics can actually clusters inputs of  transactions together and then associate them to one person or company but it’s still an assumption but the identity of the person cannot be easily revealed like this, this address might have lead to a centralized exchange and also the exchange might have either exposes the person identity or reveal it themselves. Other than this, if the person doesn’t use or hasn’t used KYCed platforms then this Analytics can do nothing further more.

The argument is on private key reveal and an address reveal doesn’t mean the private key will also be revealed except the owner falls for phishing attack.

OP didn’t mention the use of exchange and that’s why I excused that part, even blockchain analytics still needs to get help from KYCed platforms to identify someone, if they can easily identify any one by just address clusters then we would have caught all scammers who are currently draining people’s wallets

[ImGenius]

Let’s say my private keys are well protected. I use a cold wallet with a passphrase, and I keep my seed phrase somewhere safe. So, from a security point of view, my Bitcoin should be secure.

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

The Bitcoin network is designed in such a way that everyone can see each others transaction records. That doesn't mean that by seeing the transaction records someone can tell who the owner of that address is. This is exactly what takes Bitcoin a step above fiat. Everything is open source anyone can check, it anyone can investigate it, everything will happen in front of everyone's eyes. Through this no trust issue will build up over the network.
Anyway, there are millions of people in the world using Bitcoin just like you, and they are not having any problems, and you won't either.

[ColdLava40]

Let’s say my private keys are well protected. I use a cold wallet with a passphrase, and I keep my seed phrase somewhere safe. So, from a security point of view, my Bitcoin should be secure.

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

They don't  have a way to identify you, and they don't need to know your identity for an attack to happen.

Attackers can monitor transactions on the blockchain and look for patterns, such as addresses you regularly send coins to. When they notice a pattern, they may attempt things like dusting or address poisoning.

For example, in an address poisoning attack, they create an address that looks very similar to one you regularly send coins to, usually by changing a few characters. They then send a very small amount to your wallet so that their address appears in your transaction history.

The goal is to see whether you will eventually copy an address from your transaction history without carefully checking it. People do this more often than you might think, so attackers take advantage of that small possibility.

If your identity has been linkd to your addresses through transactions with centralized exchanges, your onhain privacy may already be compromised.

[drangos]

I think the key difference is between holding the private key securely and not divulging the chain of ownership for the key. A person who knows an address can't spend the BTC, but they can gain information about the transactions from that address and can link addresses together. The greater concern is if one of these is associated with your true identity, such as when you share it in an exchange or publicly. Once there, this can be used to potentially analyze on-chain activity from older and newer activity. While self-custody affords control of the coins, it does not guarantee high financial privacy.

[Baki202]

There are many bitcoin address that has so many bitcoin in them, you can easily see them using BTC explorer but there is no way to target such people because all you have is the Bitcoin address and yes they can be public, if addresses are meant to be private how will you share them with friends or businesses to receive or send funds?

Since the term "public address" implies that if you wish to send money, the public address for the specific chain you are sending the money to would be requested, I don't see anything wrong with even posting your public address. Additionally, you may use the address to follow up on a transaction, so there is nothing wrong with making our public address known. The only drawback is that anyone will be able to identify who owns it and what is inside.

The problem can only start when an information is leaked, and the information revealed more than the Bitcoin wallet address, like home address, phone number or email address, still indirectly but this will open the way for scammers to target you better, they will start sending you bad links hoping you click on them, through email and ven your phone number. They knew your worth and you have become a perfect target for them.

They will advise you to save your seed phrase carefully rather than just storing it in your email because, in the event that your email is hacked, you will have an open channel for those individuals. This is because certain information is meant to be kept private and should not be disclosed, as doing so will cost the holder their money. There are a lot of things to learn when you start holding Bitcoin or whichever altcoin.

[EarnOnVictor]

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

Keeping privacy and being security conscious about your security details is one out of many things expect of you to keep you and your Bitcoin safe. Every time you sell to receive Bitcoin or make payments with Bitcoin, you are exposing something, and someone interested could target you if they study you enough. This is not limited to hacking, scamming or physical attacks and robberies; once your balance/history is known, it's riskier, especially if you are rich That is why the wise ones would never use their main wallets for regular transactions, and still have many wallets to trick people.

[Tongley]

You need to maintain your privacy as much as possible. It is never a good idea to tell anyone about Bitcoin and it is not a good idea to tell anyone how much Bitcoin you have. Always maintain your privacy. If someone knows your address, they can easily see how much Bitcoin you have and if they know you, they can take your Bitcoins at your expense.

Always keep your Bitcoins secret

Create a wallet to hold your Bitcoins and another wallet to buy and send them

You may be at risk and your family may be at risk

Only tell one person that you have Bitcoins

[knowngunman]

You become a target, and this is why you should never share anything about your personal financial information online.

First approach.

• Targeting phissing
• Targeting malware
• Social engineering attack
• Sim-attack
• Impersonating, claiming to be support or other

The second approach is getting worse, just like being mentioned by @Mr Reporter

• Blackmailing you with your secret stuff
• Robbery at your house
• Kidnaped you, demanded your crypto
• Kidnaped one of your family and demanded to pay the ransom

They don't know your private keys, but they will be desperate to get your private key or crypto in any way they can use once they know you have a big chunk of money. Search in Google with simple keyword: "crypto millionaire got kidnapped". You will see bunch of news.

Well, I agree with some of your point but I'm still finding it hard to connect other points. If I understand correctly, Op is talking about holding his coin in a self custodial wallet where address is not directly connected to individual identity like centralized exchanges. I know it's basically a bad idea to share your financial information publicly but if it mistakenly happen like Op mentioned, is it that easily possible to link the address to him directly that they'll plan to kidnap or launch a robbery attack at his house? I don't think it's that easy and will not worth the process unless we are talking huge amounts here. Dust attack and other digital attacks is possible but physical attack requires more than just wallet address information.

[Renampun]

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

That's only if you don't connect your wallet to any centralized platform.. The moment you connect your wallet to such a platform, that address becomes linked to your identity, and they may be able to track your transactions or analyze your on-chain activity.. This means that even if you keep your private key secure, third parties already know that the address is linked to your identity.. if, for example, there's a data breach, hackers could discover that the wallet address belongs to you, making you a much easier target.. Therefore maintaining your privacy it's important, even though you secure your private key, if you don't succeed in protecting your privacy, you could still potentially become a target.

[ImGenius]

Well, I agree with some of your point but I'm still finding it hard to connect other points. If I understand correctly, Op is talking about holding his coin in a self custodial wallet where address is not directly connected to individual identity like centralized exchanges. I know it's basically a bad idea to share your financial information publicly but if it mistakenly happen like Op mentioned, is it that easily possible to link the address to him directly that they'll plan to kidnap or launch a robbery attack at his house? I don't think it's that easy and will not worth the process unless we are talking huge amounts here. Dust attack and other digital attacks is possible but physical attack requires more than just wallet address information.

Although it is not possible to know someone's identity through a Bitcoin address but if the situation is like this, when Bitcoin is bought such as through P2P the account that is used to message the buyers leaves information with the seller. If it is exchange P2P then if they buy Bitcoin through fiat the bank number or in the case of mobile banking the phone number. The biggest problem occurs when someone makes a transaction with another person through social media.
Sometimes an email or phone number or other such information goes to the seller which they may later sell to scammers and based on that information scammers may make some attempt.

[Catenaccio]

Always keep your Bitcoins secret

Manage your bitcoin like whales, let's read to see how to do that.
How to manage bitcoin like a whale.

You may be at risk and your family may be at risk

Only tell one person that you have Bitcoins

The less people know about your Bitcoin investment and your bitcoin holding, the better for your life safety and the less risk of physical attacks against you, even against your family.

Privacy and anonymity matter.
If it is about your Bitcoin inheritance plan for your family members, that's fine but there will be limited people know that.

Create a wallet to hold your Bitcoins and another wallet to buy and send them

It's about a hot wallet or hot wallets used for your daily or regular transactions. Hot wallets are only for small funds while your main fund is in cold wallets.

[uchegod-21]

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

Bitcoin transaction is already public, but does anyone who goes through those transactions know you in person or have access to your bio data and other personal details? If the answer is a full NO, then you have nothing to be bothered about. Just incase you want to know how anyone could have access to those information, then you should know that everytime you provide KYC details on an exchange, you are exposing yourself.

Sometimes, trading with people who know you in person can also expose your privacy. They know your address and can monitor your transactions. In this case, you owe yourself that duty of reducing exposure.

The major risks you stand to face is that you will become a target. Scammers will monitor you closely until they see a chance to strike.

[SquirrelJulietGarden]

Bitcoin transaction is already public, but does anyone who goes through those transactions know you in person or have access to your bio data and other personal details? If the answer is a full NO, then you have nothing to be bothered about. Just incase you want to know how anyone could have access to those information, then you should know that everytime you provide KYC details on an exchange, you are exposing yourself.

If your personal information posted by you publicly or leaked by any reasons from any platform, your Bitcoin transactions related to a known address will be also known by other people, by web scrapers and more. It's really bad for privacy and maybe for your possible legal and tax issues with government in the future too.

Privacy is very important, and KYC breaks your privacy.
Why KYC is extremely dangerous – and useless.
A call to action: Stop the FCC's KYC regime.

[Smartprofit]

Let’s say my private keys are well protected. I use a cold wallet with a passphrase, and I keep my seed phrase somewhere safe. So, from a security point of view, my Bitcoin should be secure.

If someone could figure out approximately how much BTC I have, when I receive BTC, or which transactions are connected to my wallet, how could that affect me if they still don’t have access to my private keys? Bitcoin transactions are already public, and they don’t give away my identity anyway.

There are many ways to gather a large amount of information about you and deanonymize your identity on the Bitcoin network. 🙋

For example, attackers can use a dusting attack. In many cases, it's effective.

If you don't use a good VPN or Tor, attackers can find your IP address. This is often enough to deanonymize you.

Also, when using Bitcoin, you leave a digital fingerprint. For example, you access the internet at a certain time of day, make transactions with a certain frequency, etc. Each of these parameters seems insignificant, but together they can reveal a lot about you and possibly reveal your identity.💁

[Itz-prisigold]

Bitcoin transaction is already public, but does anyone who goes through those transactions know you in person or have access to your bio data and other personal details? If the answer is a full NO, then you have nothing to be bothered about. Just incase you want to know how anyone could have access to those information, then you should know that everytime you provide KYC details on an exchange, you are exposing yourself.

I think I can see where you're going, but I'm not so sure it's as simple as you may suggest since a person's name is not actually written on the blockchain doesn't mean the person should not be concerned.  Someone might not know the person behind an address today, but the moment that address is linked to someone's real identity through an exchange or perhaps a payment that transaction history can become more meaningful.

Something else I would like you to know is that privacy is not just about concealing your identity.  Personally, there are some kind of informations about me that I may not want others to know even though they don't actually know my name.  If someone can really see and follow my financial activities, that alone is enough information about me that I really want it to be private.