Main disadvantage of Bitcoin and the others

[Come-from-Beyond]

Real cash has one distinctive feature that cryptocurrencies don't have - anonymity. All transactions are stored in blockchains so every satoshi could be tracked down to its origin. There are a lot of laundry/mixing services but noone guarantees that their owners don't record transactions passed thru such services. In our world, when governments try to control every step of citizens, anonymity becomes more and more important. Is there any hope that Bitcoin/Namecoin/Litecoin will be redesigned? This could be done if someone invents a solution of this problem and implements it. But I think there is no a way for our community to come to a consensus regarding the problem.
No real question here, I just shared my thoughts...

[1713931680]

1713931680

[CoinCidental]

Real cash has one distinctive feature that cryptocurrencies don't have - anonymity. All transactions are stored in blockchains so every satoshi could be tracked down to its origin. There are a lot of laundry/mixing services but noone guarantees that their owners don't record transactions passed thru such services. In our world, when governments try to control every step of citizens, anonymity becomes more and more important. Is there any hope that Bitcoin/Namecoin/Litecoin will be redesigned? This could be done if someone invents a solution of this problem and implements it. But I think there is no a way for our community to come to a consensus regarding the problem.
No real question here, I just shared my thoughts...

the majority of 1 USD american banknotes once tested positive for traces of cocaine ,it didnt make any differnce to their value though

i think bitcoins will be same ,at some stage ,the majority of them will have been mixed through blockchains of Silkroad transactions and all sorts of grey area stuff

i dont see it making much differnce to the overall coin world .......

[proudhon]

I still have yet to see an analysis that picks a random address from the blockchain and successfully identifies its owner by name.

[Come-from-Beyond]

I still have yet to see an analysis that picks a random address from the blockchain and successfully identifies its owner by name.

It could be very hard. But if u get an address to be known to belong to a particular service/person, u could evaluate (with some probability) turnover of its capital. Statistical analysis gives quite precise numbers...

Real cash doesn't have such drawback.

[grantbdev]

Your real identity is more likely to be indentified going in public (where there are cameras, fingerprints, etc.) and paying in cash than you are using bitcoin "correctly." There is a reason that Silk Road uses bitcoin.

[CoinCidental]

I still have yet to see an analysis that picks a random address from the blockchain and successfully identifies its owner by name.

All coins will probably be "tainted" at some stage ......even if you could say a coin was involved in an illegal transaction once ,god knows how many tumblers and wallets and banks and gambling sites its going to be in after that

the only possible  danger  would maybe be in immediate reciept of a marked coin (like set up by the cops in a sting   doing something illegal etc )

i dont think its worth worrying about tbh

[austonst]

I still have yet to see an analysis that picks a random address from the blockchain and successfully identifies its owner by name.

It could be very hard. But if u get an address to be known to belong to a particular service/person, u could evaluate (with some probability) turnover of its capital. Statistical analysis gives quite precise numbers...

Real cash doesn't have such drawback.

Two issues.

1) People don't use one address for everything they do. Businesses, especially, will often create one new address for every customer or transaction. In order to calculate the the "turnover of capital", you'd need to know every address they own.

2) The best methods I know for taking one address and figuring out which other addresses are owned by the same person are checking for multiple inputs and checking for the output that looks more like the change output. Addresses with a lot of transactions back and forth between them would also be likely, though not certain, to be connected. It's extremely easy to avoid all of these with proper control of your addresses. Avoid multiple inputs by intelligently selecting outputs, and by making a series of combining transactions. Avoid obvious change outputs by looking over the input values, fees, and the real cost of the transaction and selecting proper numbers. Avoid having addresses interconnected with transactions by using a lot of addresses; one per customer or something. If you're careful, it's easy to be very anonymous with bitcoins.

[Come-from-Beyond]

the only possible  danger  would maybe be in immediate reciept of a marked coin (like set up by the cops in a sting   doing something illegal etc )

Good point. No need to dig thru whole chain. Just pay attention to where coins were transferred after some checkpoint.

i dont think its worth worrying about tbh

U'll change ur mind after buying something that is "illegal" from gov's point of view.

[Come-from-Beyond]

It's extremely easy to avoid all of these with proper control of your addresses.

Haven't seen "Private mode" option in my bitcoin wallet. It's easy for u but not for millions housewives. Bitcoin have to be more user-friendly to become popular.

[CoinCidental]

i dont think its worth worrying about tbh

U'll change ur mind after buying something that is "illegal" from gov's point of view.
[/quote]

I wont be selling drugs to get bitcoins anyway and if i ever have coin in my posession that was used last year in some cocaine deal on SilkRoad it wont have been me that made that illegal  transaction ,although somehow later i ended up with that same coin .....

Similar to how if i had a dollar in my pocket that could be traced back to a bank robbery in 2004

It certaintly doesnt prove i robbed that bank in 2004 .........

[Come-from-Beyond]

I wont be selling drugs to get bitcoins anyway

That's in YOUR country. What about other countries where even searching of topics containing "truth" considered to be illegal?

[wareen]

It's extremely easy to avoid all of these with proper control of your addresses.

Haven't seen "Private mode" option in my bitcoin wallet. It's easy for u but not for millions housewives. Bitcoin have to be more user-friendly to become popular.

Are those the millions of housewives/househusbands that willingly share the most intimate details/pictures on facebook/twitter/co with the whole world to see? Do you really think strong anonymity is a big issue for them?

And as was said before: strong anonymity is absolutely possible with Bitcoin and it would not be too hard to build a privacy-focused client. The demand just is not that great - not even within the Bitcoin community it seems, although this community is probably much more privacy-aware than the average. Having said that, I'm also convinced that a privacy-focused client is bound to appear at some point!

[rjk]

It's extremely easy to avoid all of these with proper control of your addresses.

Haven't seen "Private mode" option in my bitcoin wallet. It's easy for u but not for millions housewives. Bitcoin have to be more user-friendly to become popular.

Are those the millions of housewives/househusbands that willingly share the most intimate details/pictures on facebook/twitter/co with the whole world to see? Do you really think strong anonymity is a big issue for them?

And as was said before: strong anonymity is absolutely possible with Bitcoin and it would not be too hard to build a privacy-focused client. The demand just is not that great - not even within the Bitcoin community it seems, although this community is probably much more privacy-aware than the average. Having said that, I'm also convinced that a privacy-focused client is bound to appear at some point!

Truth, he speaks it. Coin Control is slated for release in v0.7, I believe.

[mb300sd]

It's extremely easy to avoid all of these with proper control of your addresses.

Haven't seen "Private mode" option in my bitcoin wallet. It's easy for u but not for millions housewives. Bitcoin have to be more user-friendly to become popular.

Are those the millions of housewives/househusbands that willingly share the most intimate details/pictures on facebook/twitter/co with the whole world to see? Do you really think strong anonymity is a big issue for them?

And as was said before: strong anonymity is absolutely possible with Bitcoin and it would not be too hard to build a privacy-focused client. The demand just is not that great - not even within the Bitcoin community it seems, although this community is probably much more privacy-aware than the average. Having said that, I'm also convinced that a privacy-focused client is bound to appear at some point!

Truth, he speaks it. Coin Control is slated for release in v0.7, I believe.

I don't think coin control is making it, but raw transactions allows you to accomplish the same thing, even better because you can select outputs and not just addresses.

[rjk]

Truth, he speaks it. Coin Control is slated for release in v0.7, I believe.

I don't think coin control is making it, but raw transactions allows you to accomplish the same thing, even better because you can select outputs and not just addresses.

Thanks for the info, I get mine secondhand since I stay out of the dev section.

[unclemantis]

Cash is serialized isn't it? So to say cash is anonymous is only HALF CORRECT!

[Come-from-Beyond]

Cash is serialized isn't it? So to say cash is anonymous is only HALF CORRECT!

OK. Let's replace "cash" with "coins" then. Coins aren't serialized. Bitcoin shouldn't contain "coin" in its name, coz every satoshi is serialized.

[BkkCoins]

Have you ever tried following coins in the blockchain? It's damn hard and when I've tried I've never been able to figure out anything. Even the big hacks so far have led to very little evidence of what went where. Anyone wanting to be anonymous isn't going to publish their name with an associated address, they're not going to funnel lots of transactions thru a couple of main addresses either. So there is not much of a "locus" for making connections.

Has there been any single case yet of the blockchain being demonstrably used as evidence? That's not a rhetorical question. I'd actually like to know.

[Meni Rosenfeld]

Read up on Open Transactions. It comes with its own set of tradeoffs and I don't know how it will fit in the Bitcoin world in large, but just because Bitcoin itself isn't truly anonymous doesn't mean it can't be used anonymously by those who want it.

Also, you can have Bitcoin p2p mixing transactions which do not rely on a centralized service which could misbehave.

[finkleshnorts]

With common sense, it is very possible to be completely anonymous with bitcoin. And I mean completely.

Off the top of my head, here's one way. Suppose I need to make an anonymous purchase of 10 btc (for brevity's sake I am excluding consideration for transaction fees)


1) I buy 30 btc from someone on this forum, sent to a fresh address (address A).

2) spread them across more fresh addresses. 20 btc to address B, 9.1209874913846 to address C, and keep the change in the original address.

3) Repeat step 2 with address B as many times as desired, with 10 coins ending up in Address X.

4) Send all 10 coins intact from Address X to another fresh address, repeat as many times as necessary.

5) send to merchant.

6) NEVER CROSS CONTAMINATE ADDRESSES--EVER. This is the key to anonymity. Just ask znort. You must use a wallet that allows you to manipulate change addresses. The downside of this is that addresses such as address C can only be used to purchase things under that amount.

Using this technique, make sure you vary the time greatly between transactions. It would be good to always have an address on hand with anonymous coins in it, if this is your kind of thing.


I would never even need go to these lengths, even if I were buying nuclear warheads from Russia.

I have never needed anonymity because I have never used bitcoins for shady things, but I wouldn't hesitate should the need arise. I'd feel better about staying anonymous with bitcoin than with cash or with anything else. Also, you can always just hand over private keys.