Bitcoin Is Transparent, But Should Its Users Be?

[Lexandroove]

Bitcoin’s security is already established as a fundamental quality, but another aspect I've noticed getting much-needed attention is its privacy.

Because Bitcoin transactions are pseudonymous, not fully anonymous, they require a critical layer of privacy, where tools like Tor obscure user IP addresses, making it much harder for observers to link transaction activity to real-world identities.

This plays into preserving financial freedom, in my opinion, as in regions where governments or financial institutions restrict access to capital, Tor provides a crucial pathway to the global economy, allowing users to sidestep firewalls and surveillance that would otherwise block connections to the Bitcoin network.

Though it does not change the fact that Bitcoin's blockchain is a permanent, public ledger (as it cannot hide users’ transaction graphs), what do y’all think would be its long-term impact on Bitcoin privacy? Does it have the potential to become a major infrastructure in this regard?

[cryptoaddictchie]

Though it does not change the fact that Bitcoin's blockchain is a permanent, public ledger (as it cannot hide users’ transaction graphs), what do y’all think would be its long-term impact on Bitcoin privacy? Does it have the potential to become a major infrastructure in this regard?

Honestly with its permanent and transparent transaction without using privacy layer it could be utilize as Government process for transaction and one thing for sure will happen. Corruption will be lessen in any Government mandate if they use it for that sense. Philippines is currently studying the application of blockchain to Government expenditures and this will make a transparent approach through the people on how their tax money being spent. But obviously this will not be agreed by politicians since they are simply dumb corrupt people.

[SeriouslyGiveaway]

Because Bitcoin transactions are pseudonymous, not fully anonymous, they require a critical layer of privacy, where tools like Tor obscure user IP addresses, making it much harder for observers to link transaction activity to real-world identities.

There are other things you have to learn and do it for your practice like open source, non custodial wallet, run a Bitcoin full node, use Bitcoin change addresses, do UTXO selection for your transactions, don't send round numbers in transactions. These things are contributors for your privacy, and Tor connection of your node to other peers on Bitcoin blockchain and network is like a very last contributor for your privacy.

General guide for Bitcoin transactions and privacy.
Bitcoin privacy techniques.
Bitcoin privacy guide.

[slaman29]

Transparency and privacy aren't meant to be the same things. We can have a transparent AND private system as proven by Bitcoin. Why there was never a need to reveal personal information when there is no benefit in a money system?

Philippines is currently studying the application of blockchain to Government expenditures and this will make a transparent approach through the people on how their tax money being spent. But obviously this will not be agreed by politicians since they are simply dumb corrupt people.

Didn't they already spend billions on something like this before? Or was that some private blockchain.

[cryptoaddictchie]

Didn't they already spend billions on something like this before? Or was that some private blockchain.

I totally forget if they didnt if they did Im sure they wont spend it all as these people always slandered budget funds from the Government. But they did spend on the potential of a chain it wasnt that popular but they plan to use that to implement their plan Law that uses blockchain to handle government contracts expenditure. Just forget whats the name of the chain or what network they will cater but its not bitcoin since they are using a smart contract.

[Basels]

If you really want to be anonymous while using Bitcoin, you'd have to act the way hackers do. They use anonymizing tools such as virtual machines, Tor and Tails. Then they use mixing and decentralized swap services to make sure that their trails are obscure. They also avoid exchanges which may flag their transactions and freeze them. These steps, as far as I know can keep you anonymous while using Bitcoin. But then, I don't see why the ado if you're acting within the ambits of the law, though I believe privacy is everyones's right.

[Ziskinberg]

It's your choice if you want to keep your privacy or not, because the moment you use a platform that is regulated by the government, it means you have already surrendered some of your privacy as the wallet you are using will be linked to centralized platforms like exchanges. So think wisely, avoid those platforms if you want to preserve your privacy.

[bitbollo]

It is a well known topic and would be a kind of balance between trusting double coins not spent / privacy of these coins.
Potentially there is always the risks to have some issue - just for checking what happens with authorities - its not means they would find something.
There are many ways to have this kind of privacy - that in a certain way would become fragile if linked to some illicit.
Anyway, it would not change anything like other forms of payments that are most of the time fully doxxed completely tracked. Unless we are talking about "cash" or metals there isn't privacy in these transactions.

[Nathrixxx]

Bitcoin’s security is already established as a fundamental quality, but another aspect I've noticed getting much-needed attention is its privacy.

Bitcoin privacy should not be anything of concern to us as long as we understand how we can have this privacy; don't expect someone that uses a centralized exchange to have privacy despite their investment in Bitcoin.

The same thing applies to anyone who shares their personal details with any centralized platform in the name of acquiring Bitcoin or trading it; running a full node is one of the most secure means to maintain your privacy in the Bitcoin network, and nothing can stop you from achieving it as long as you understand the procedures.

[Ambatman]

I don't really get your post much but to your title
There's a reason it is pseudonymous and tries to separate your real life character
From your bitcoin.
Making the ledger public allows anyone to independently verify what is happening on the network rather than relying on a third party
This here is what makes decentralization and trustless works.
So a feature not a flaw.

[yudi09]

Though it does not change the fact that Bitcoin's blockchain is a permanent, public ledger (as it cannot hide users’ transaction graphs), what do y’all think would be its long-term impact on Bitcoin privacy? Does it have the potential to become a major infrastructure in this regard?

Transparency allows users to track transaction flows, which prevents criminals from lying about the transactions they’ve made because everything is recorded. As I understand it from what you’re saying, Bitcoin’s security depends on users maintaining and protecting it. Equating privacy with transparency can lead to different interpretations depending on the context.
As long as users can keep their Bitcoin addresses and seed phrases confidential over the long term, there simply won’t be any negative consequences for them.

[hugeblack]

With an increasing reliance on centralized services and periodic AML verification, individual privacy has come into question.
Therefore, the solution is not limited to using Tor or running a full node; it also involves avoiding centralized services or any services that might request additional personal data from you.
Alternatively, you could switch to Monero if you are seeking a higher level of privacy.

[serjent05]

Bitcoin is indeed transparent but the Bitcoin whitepaper also mentions pseudoanonymity, so even with Bitcoin being transparent, the whitepaper also mentions the protection of its users.  From here, the Bitcoin whitepaper does not require its users to be transparent but rather, it tends to protect its users as it was stated on: Section 10 – Privacy, page 6 of the whitepaper PDF

"The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone."

Though it does not change the fact that Bitcoin's blockchain is a permanent, public ledger (as it cannot hide users’ transaction graphs), what do y’all think would be its long-term impact on Bitcoin privacy? Does it have the potential to become a major infrastructure in this regard?

Honestly with its permanent and transparent transaction without using privacy layer it could be utilize as Government process for transaction and one thing for sure will happen. Corruption will be lessen in any Government mandate if they use it for that sense. Philippines is currently studying the application of blockchain to Government expenditures and this will make a transparent approach through the people on how their tax money being spent. But obviously this will not be agreed by politicians since they are simply dumb corrupt people.

I think the Philippine government just states it to at least minimize the citizens' worry, but deeply, they won't even finish those promised studies.  I think it has been months since that statement, and yet there is no update about it. 

So I agree that politicians will not agree to it, but I disagree that they are dumb, they are too wicked and corrupt. They will do anything that will make their corruption hidden so I think we won't be seeing any progress on this blockchain application on Government expenditures.

[Lexandroove]

Transparency and privacy aren't meant to be the same things. We can have a transparent AND private system as proven by Bitcoin. Why there was never a need to reveal personal information when there is no benefit in a money system?

Philippines is currently studying the application of blockchain to Government expenditures and this will make a transparent approach through the people on how their tax money being spent. But obviously this will not be agreed by politicians since they are simply dumb corrupt people.

Didn't they already spend billions on something like this before? Or was that some private blockchain.

Referring to a previous government investment in blockchain privacy infrastructure, or the development of Tor itself?

They're quite different, Tor is an independent privacy network that helps obscure users’ IP addresses; it doesn't make Bitcoin’s public transaction history private.

[Lexandroove]

If you really want to be anonymous while using Bitcoin, you'd have to act the way hackers do. They use anonymizing tools such as virtual machines, Tor and Tails. Then they use mixing and decentralized swap services to make sure that their trails are obscure. They also avoid exchanges which may flag their transactions and freeze them. These steps, as far as I know can keep you anonymous while using Bitcoin. But then, I don't see why the ado if you're acting within the ambits of the law, though I believe privacy is everyones's right.

You shouldn't have to behave like a hacker to protect your financial information. Tools like Tor and Tails can improve network-level privacy, but they don't automatically make Bitcoin transactions anonymous, since blockchain activity remains publicly traceable.

It pretty much emphasises my belief that privacy should be treated as a normal feature of financial freedom, not something people only need when they have something to hide.

Being law-abiding shouldn't mean having your entire financial history exposed to the public.

[Mrbluntzy]

Though it does not change the fact that Bitcoin's blockchain is a permanent, public ledger (as it cannot hide users’ transaction graphs), what do y’all think would be its long-term impact on Bitcoin privacy? Does it have the potential to become a major infrastructure in this regard?

There are methods that people are using to strengthen their privacy and just like the methods that was listed by SeriouslyGiveaway, anyone that really want total privacy will use the available methods to protect their identity. What is already the impact of Bitcoin privacy is the fact that government do not want individual to have financial privacy which is why they decide to fight any platform that supports privacy and wants to regulate crypto platforms to make everything centralized. We can see how they fought mixers, however some people still use the service of mixer and that's also one way of maintaining privacy. Government will always keep trying to make Bitcoiners use centralized platforms but on the long term, those that value privacy will continue to use available methods to maintain privacy.

[Franklyn-wood]

If you really want to be anonymous while using Bitcoin, you'd have to act the way hackers do. They use anonymizing tools such as virtual machines, Tor and Tails. Then they use mixing and decentralized swap services to make sure that their trails are obscure. They also avoid exchanges which may flag their transactions and freeze them. These steps, as far as I know can keep you anonymous while using Bitcoin. But then, I don't see why the ado if you're acting within the ambits of the law, though I believe privacy is everyones's right.

Using the above mentioned tools can help keep personal identity, but not everyone understand the logic and implement. I never new that such thing exit, not until I meet a friend some years ago , who explained how it works to me. It not really necessary since the country I leave in is not against crypto and I am not into any shady activities, I can go ahead to use methods that best suits my need.
Most important thing is to be careful of what we do, talk, or show people about our investment. No body is perfect, but our carefulness matters to our investment.

[cryptoaddictchie]

I think the Philippine government just states it to at least minimize the citizens' worry, but deeply, they won't even finish those promised studies.  I think it has been months since that statement, and yet there is no update about it. 

So I agree that politicians will not agree to it, but I disagree that they are dumb, they are too wicked and corrupt. They will do anything that will make their corruption hidden so I think we won't be seeing any progress on this blockchain application on Government expenditures.

So theres no update at all? Kek this Government promises. With the power of blockchain they can easily wipe out corrupted politicians and not having it by inducting some possible negative effect is only an excuse to their hidden activity. The one proposing it have studied and set parameters for it that they cant just simply agree not because its not competent but just a hindrance to their evil doings.

[Smartprofit]

As far as I remember, reality TV shows where people publicly displayed their lives in front of millions of viewers were very popular around the time Satoshi Nakamoto created Bitcoin. 🙋

It was the concept of transparency... And it probably occurred to many thinkers back then that our world would be a much better place if there were no secrets. In 2009-2010, the traditional financial system was full of secrets... So, when someone wanted to understand what was really going on in finance, they hired independent auditors. Thanks to Bitcoin's transparent blockchain, auditors are no longer necessary. Anyone can independently determine which transactions actually took place on the network. Meanwhile, the identities of coin owners remained hidden in the past.

However, those in power have turned the "concept of transparency" on its head.  They decided that all financial transactions of ordinary people should be completely transparent (AML, KYC, big data), while the financial transactions of those in power should be completely hidden (trust funds, etc.). This is precisely the path that the modern financial system has taken (and, unfortunately, Bitcoin as well).

As a result, the issue of maintaining anonymity and privacy for Bitcoin network users has become extremely important. Unfortunately, Satoshi Nakamoto didn't have time to solve it, and now, in my opinion, it is likely practically impossible. 🤷 Other cryptocurrency projects, such as Monero, are solving this problem.

[X-ray]

You're not wrong with it being private depends on the user doing privacy technique and so on when using Bitcoin and despite all that, the transaction is still recorded forever.

I think not too long ago there was topic about bitcoin shielded transaction that more or less use zk proof and the funds represented as encrypted notes, instead of full privacy like XMR it's going to be Zcash style privacy.

But, this method seems to have disadvantage of relying on centralized indexer.

For now if you want privacy you'll need to use decentralized on ramp through p2p like bisq that doesn't link your address to centralized exchange that points to your KYC.