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Author Topic: Repost: How anonymous are bitcoins?  (Read 9502 times)
satoshi
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November 25, 2009, 06:15:57 PM
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bitcoinbitcoin:
How anonymous are bitcoins?

Can nodes on the network tell from which and or to which bitcoin address coins are being sent? Do blocks contain a history of where bitcoins have been transfered to and from? Can nodes tell which bitcoin addresses belong to which IP addresses? Is there a command line option to enable the sock proxy the first time that bitcoin starts? What happens if you send bitcoins to an IP address that has multiple clients connected through network address translation (NAT)?

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satoshi
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November 25, 2009, 06:17:23 PM
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> Can nodes on the network tell from which and or to which bitcoin
> address coins are being sent? Do blocks contain a history of where
> bitcoins have been transfered to and from?

Bitcoins are sent to and from bitcoin addresses, which are essentially random numbers with no identifying information.

When you send to an IP address, the transaction is still written to a bitcoin address.  The IP address is only used to connect to the recipient's computer to request a fresh bitcoin address, give the transaction directly to the recipient and get a confirmation.

Blocks contain a history of the bitcoin addresses that a coin has been transferred to.  If the identities of the people using the bitcoin addresses are not known and each address is used only once, then this information only reveals that some unknown person transferred some amount to someone else.

The possibility to be anonymous or pseudonymous relies on you not revealing any identifying information about yourself in connection with the bitcoin addresses you use.  If you post your bitcoin address on the web, then you're associating that address and any transactions with it with the name you posted under.  If you posted under a handle that you haven't associated with your real identity, then you're still pseudonymous.

For greater privacy, it's best to use bitcoin addresses only once.  You can change addresses as often as you want using Options->Change Your Address.  Transfers by IP address automatically use a new bitcoin address each time.

> Can nodes tell which bitcoin addresses belong to which IP addresses?

No.

> Is there a command line option to enable the sock proxy the first
> time that bitcoin starts?

In the next release (version 0.2), the command line to run it through a proxy from the first time is:
bitcoin -proxy=127.0.0.1:9050

The problem for TOR is that the IRC server which Bitcoin uses to initially discover other nodes bans the TOR exit nodes, as all IRC servers do.  If you've already connected once before then you're already seeded, but for the first time, you'd need to provide the address of a node as such:
bitcoin -proxy=127.0.0.1:9050 -addnode=<someipaddress>

If someone running a node with a static IP address that can accept incoming connections could post their IP to use for -addnode, that would be great.

> What happens if you send bitcoins to an IP address that has multiple
> clients connected through network address translation (NAT)?

Whichever one you've set your NAT to forward port 8333 to will receive it.  If your router can change the port number when it forwards, you could allow more than one client to receive.  For instance, if port 8334 forwards to a computer's port 8333, then senders could send to "x.x.x.x:8334"

If your NAT can't translate port numbers, there currently isn't a command line option to change the incoming port that bitcoin binds to, but I'll look into it.
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August 19, 2010, 03:05:52 PM
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Why would you run bitcoin through Tor?  What is the security advantage?
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August 19, 2010, 03:27:21 PM
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I just realize that this is a very old post.

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August 19, 2010, 04:38:28 PM
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Why would you run bitcoin through Tor?  What is the security advantage?

I wouldn't say running bitcoin through tor would be a security advantage, rather more of an anonymity advantage in that it would be almost impossible to link a transaction to your ip.

17VMPV9idfM8zYSR2ftxpXbBbkvpK5oUih
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August 19, 2010, 06:04:49 PM
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How might someone determine your IP address through bitcoin (assuming you are not sending using the IP address option)?  I'm just curious how Tor protects your anonymity beyond the protection offered by bitcoin.
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August 21, 2010, 10:14:56 PM
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Quote
The possibility to be anonymous or pseudonymous relies on you not revealing any identifying
information about yourself in connection with the bitcoin addresses you use

Much easier said than done.    Most routine e-commerce transactions will link the bitcoin address with other identifying information, and determined attackers can overcome the privacy of even extremely careful bitcoin users:

(1) If you don't use Tor, the merchant (or whoever your payment counterparty might be) will have a log or cache entry linking your IP address to your bitcoin address.

(2) If you use Tor, but the end-to-end info is unencrypted, the Tor exit node can (and you should assume will) have a log or cache entry linking your bitcoin address, any identifying info you sent to the merchant, and the merchant.

(3) If you use Tor, but forget to or can't turn off web cookies, your bitcoin address can be linked to a web cookie, which in turn is often linked to your IP address by an advertising aggregator like Google/Doubleclick.

(4) If you order goods shipped to your address, the merchant will have a log or cache entry linking your name, snail-mail address, and any other identifying information you gave, even if you used Tor.

(5) Each bitcoin record links your bitcoin address with those of all the counterparties that address has transacted with.   Depending on the length and variety of the record it can reveal your shopping pattern which is often uniquely distinguishable from other shopping patterns, just as fingerprints or DNA are unique. 

(6) Determined investigators or a software system somebody might write (similar to advertiser's software used to track user preferences across merchants) can gather and integrate information from different bitcoin nodes, vendors, etc. the bitcoin user's software has communicated with.   Even if one log by itself doesn't tell much information, an aggregation of logs from several different merchants and transactions might speak volumes.

(7) etc., there are undoubtedly many other ways to link bitcoin addresses with other identifying information, caused by bitcoin itself, by outside entities the information-gathering and sharing nature of which most users will not be aware, or combinations thereof.

Secure anonymity on the Internet is pretty hard to do.

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August 21, 2010, 11:55:47 PM
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All the information gathering you mentioned above did not come from the bitcoin network.  You are referring to common browser and user security weaknesses.  Let's assume that a user is not revealing personal information on a channel outside of the bitcoin network.  Maybe they are using Tor (and turning off cookies).  Or maybe they place an ad in the newspaper with their bitcoin address.

What might someone be able to learn about this bitcoin address I saw in a recent newspaper classified ad: 1N9vKDweKCF9Yibapky7UmqRJ8PKgnvM2s

I'm fairly technical and I feel confident you cannot learn anything about the bitcoin client that is receiving bitcoins at that address.

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December 16, 2010, 08:31:18 PM
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All the information gathering you mentioned above did not come from the bitcoin network.  You are referring to common browser and user security weaknesses.  Let's assume that a user is not revealing personal information on a channel outside of the bitcoin network.  Maybe they are using Tor (and turning off cookies).  Or maybe they place an ad in the newspaper with their bitcoin address.

What might someone be able to learn about this bitcoin address I saw in a recent newspaper classified ad: 1N9vKDweKCF9Yibapky7UmqRJ8PKgnvM2s

I'm fairly technical and I feel confident you cannot learn anything about the bitcoin client that is receiving bitcoins at that address.



http://blockexplorer.com/address/1N9vKDweKCF9Yibapky7UmqRJ8PKgnvM2s

You should try my Minecraft server.
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