Topic: Bitcoin is NOT anonymous--and is a dangerous privacy issue for its users (Read 323 times)

Give me some high-profile example (i.e. not a random spammer or shill on a forum or so, but a major influencer ...) where the warnings about address reusage is omitted.
"pseudonymous" is of course correct.
Seriously, I think that doesn't happen too often.

Not reusing Bitcoin addresses is not a sophisticated technique, but the normal functioning of Bitcoin clients.

This is different in the case of Ethereum for example, where address reuse is completely normal and even required for some smart contracts.

CoinJoins are sophisticated, but they're normally only necessary if you reused or published addresses somewhen.

My problem however is that you write in your title that "Bitcoin is a dangerous issue". This is FUD and wrong.

If you had written something in the vein of: "Bitcoiners, please care about your privacy and follow these basic rules ...", I'd not complain

Here I somewhat agree, but again: that's not Bitcoin's fault. The Bitcoin Core client already works in a fashion which is privacy-preserving.

There are clients who have some privacy risks, like SPV clients connecting to servers which may be run by chain analysis companies. But in this case your title should also be different, something like "Be careful with SPV clients."

I partly agree here, again.

Bank and Bitcoin transactions have different kinds of risks. In the case of banks/credit cards, the risk is that the entity is hacked, but then you will know not only the transactions but also the IBAN or even worse, personal data.
In the case of the Bitcoin transaction, the risk is that you publish an address somewhere and this can be associated to you, either via IP address or via other data yourself.

I would instead rephrase: A Bitcoin transaction can be more privacy-preserving than a bank transaction if you follow the "no address reusage" principle and mix/CoinJoin/AtomicSwap all coins where you didn't follow that rule, and use either a full client or a privacy-preserving light client.

If not, then it can be (potentially much) worse privacy-wise. It is however a gradual affair: it can be even almost exactly as privacy-preserving as a bank transaction, if you transact only between centralized, but regulated wallets/exchanges. Bitcoin simply gives more options to you.

Why do I partially agree? Because many, probably most users do it wrong. Yes, that's a problem. But again, it's not Bitcoin's fault. Bitcoin is continuously improving in this matter (e.g. with Taproot and silent payments).

You simply haven't even read my post. I wasn't talking about IP addresses as they relate to Bitcoin.

Maybe actually read the posts before commenting on them--especially when you respond with... personal attacks.

Instead of the OP to learn through asking questions on the relationship between these IP address and bitcoin transactions, he concluded blindly by misleading the audience that will follow him/her blindly without doing extra research.
On IP address, people do use fake IP address through VPNs, can these people be traced?

OP needs to learn more about Bitcoin transactions and how they are been broadcasted in Bitcoin nodes and stop to conclude fast without learning. Learn and learn before you make conclusions.

People's intuition is that something only involving numbers will be anonymous. I am old enough to remember when people though IP addresses were anonymous, and unless they gave a website their personal information (or they used fake info), they would be totally safe. It took years of consumer education to dispel this myth--and a third of people probably still don't get it.

What's crazy is I often still read articles on bitcoin, and often times on decently well "received" outlets, and they still try and push the old narrative that bitcoin is anonymous.  I mean if anyone who does any sort of basic research on bitcoin will quickly come to realize that just not the case.  Not to mention making bitcoin anonymous would ruin it's future potential.  A lot of people try to argue against this, but it's a fact as far as I'm concerned (just look at Monero for reference).

You've missed the point of my OP entirely. It has nothing to do with IP addresses. Please try reading it again?



Yes, centralized exchanges. Are these companies somehow different than all of the other companies in the world that collect personal information and resell it? Companies buy and sell customer data all of the time, and it's a business worth tens of billions of dollar per year.

If you think these companies will pass up billions of dollars in basically free money, you are the one living in a dream.

You know that thing about killing the messenger?
What does a decentralized and centralized netwrok have to do with this?

You order a pizza from a restaurant next to you, you pay via BTC, and the guy receiving the order now knows your name, your address, and your BTC address, have you thought of this? Besides, now be honest and swear to god, on how many platforms have you done KYC to date?


Each IP is assigned to to a customer by the ISP, the ISP will always know what customers(s) have used that IP and for what connection, it has been like this since the first internet provider. You visit a website you expose your IP, if enough websites share their databases and logs along your browsing pattern yeah, your history can be traced, just as how leaked email addresses would work in tracking you.


Remember what happened to BurtW? Or others like him:
https://www.coindesk.com/markets/2017/05/03/localbitcoins-user-pleads-guilty-after-undercover-sting/

Such information has also been trending in social media platforms these days but I have not really paying attention on them. Someone was saying that Bitcoin is not anonymous because of the end use of the coin. Like if you transfer the coin to electrum, you will send it to an exchange and the exchange has a KYC which can be tranced from the electrum transaction to the exchange and the owner of the exchange will be known at the end.

And Bitcoin can be anonymous when the two parties use electrum to electrum for the transaction or the trading but one person will still use exchange.

The issue is that you are looking at the address like it's yours and you will always be known, but that's not the case in most times, just because we might give KYC to exchanges, doesn't mean that every address we have is connected. So, if I buy bitcoin p2p and put it on some address, as long as I do not move it, that means I am going to be fine.

Plus if I can find p2p buyer again, nobody knew who I was during all of that period both buying and selling. I think that's important and we should be considering that part as very important. I believe that we could make it work somehow, will take a while but we could make that work and we just prefer not to right now, that's the most important part.

We are willingly giving our KYC to anywhere that asks it, hell people started to give their KYC even for airdrops which makes no sense to me a tall, willing to give your information fully to some dev just in return of their fake made up token is not a smart move. So in this crypto world, we live in right now, we are definitely looking at something that's a lot less privacy oriented, people are not interested in privacy, we are interesting in just reaching whatever we can reach in profit that's it.

The issue regarding privacy related to Bitcoin transactions is that when you use a centralized exchange for your transactions, because your Bitcoin address is associated with your account, this means that the exchange platform knows who owns the wallet address. However, if you make transactions via a decentralized exchange, no one will know your identity, because you are completely transacting via a decentralized platform that is KYC free. So basically, people will only see how many Bitcoins are in your wallet, but they can't guess who has them - and that's why Bitcoin is said to be pseudonymous, not anonymous.

This is where you got it all wrong. IP address isn't enough validation to detail a person on the internet, anyone can used fake IP address that gives a person different address and locations. Even this forum don't judge people by IP address because people protect their privacy alot with different IP addresses. I hope this clear your first intuition.


I will be waiting for you to build one so we can have the first person ttat personalized ads from people. Where will you get addresses from? Centralized exchanges? You want to pay Binance, Kucoin, Bybit, Coinbase to give you all their customers data, email, documents, photographs and all their corresponding wallet addresses? Please wake up from your dream. 


I will assumed you know a little about Bitcoin but you are wrong about many things, start with Mastering Bitcoin and Bitcoin for beginners, it will help you reshape your thinking about some go the misconceptions aboyr Bitcoin.

It is absolutely not better than a bank transaction. This is the sort of dangerous misinformation I have been talking about here.

A typical credit card transaction is known to you, the bank involved, and the counterparty. The latter two present a risk of exposure of your privacy, but only  two entities that can expose your data--and they are known entities that are also heavily regulated. If a bank exposes your personal information, you can sue them for damages, etc.

On the other hand, a Bitcoin transaction is known to potentially five billion entities because it's open to the whole world. And none of those entities are accountable to any law or regulation, and they can't be sued no matter how criminal their intentions are since they cannot be known.

You are much better off using a credit card transaction, from the standpoint of privacy, than you are a standard Bitcoin transaction.

Bitcoin is not a dark ledger and it is traceable but if you know how to use your Bitcoin wallet with a full node, Tor, good practice with addresses, change addresses, inputs and outputs, you can increase your privacy and anonymity.

It's not perfect in privacy and anonymity but it is better than if you use banks for bank transfers and other services that under control and management of governments.

General guidelines for sending BTC transactions

That's true, so what? if someone think Bitcoin is anonymous, it's their mistake, Bitcoin is never been anonymous.

Yep Monero and Bitcoin mixers exist because Monero is a cryptocurrency better in terms of privacy and mixers is used to make Bitcoin more private.

However, Monero is already viewed as an illegal currency, many big CEX, institutions, banks and countries have start to ban this currency.

While Bitcoin, it's the only one currency that high unlikely get banned by many countries, instead some of countries who use to ban Bitcoin start to unban it.

I think it's completely fine, you can enjoy some level of privacy and a probability to grow your wealth in Bitcoin.

It's commonly known that Bitcoin is not anonymous, but rather pseudonymous.


Although it's worth to mention that just like you can use multiple IP address, you also can use multiple Bitcoin address. That's why most wallet software generate HD wallet.


I expect blockchain analysis company already offer such service. Although analysis result / data provided by them isn't always accurate.



Just don't forget that privacy and anonymity are 2 different thing.

In the early days of Bitcoin this might have been true, but people are educated enough by now to know there are certain shortcomings in privacy if you are not consciously going out of your way to make it harder to be tracked and deanonymized.

Mixers were once very popular because of this reason and eventually people also started using coinjoin and privacy coins. Base layer privacy has not had meaningful improvement in a long time. Until there is less hostility from governments, progress will remain stalled.

With the amount of surveillance we are subjected to when we use the internet there is always a possibility that your personal identity can be attached to certain on-chain activity and you could possibly be targeted because of this. It is important to limit how much information you allow others to collect. Content blockers, VPNs, alias emails are all useful in preventing your personal data from being exposed.

Are you a real newbie? This argument is very much known, very much old and very much settled heheheh. If you want privacy you can use Monero if you can still buy this from exchanges.

Also, I reckon much of us small minnow users use bitcoin to speculate on altcoins and gamble on different games and sports. We do not need privacy for this. The criminals however, they have different problems because they need  privacy for their activities.

Since you are talking about web servers I guess you were talking about websites or exchanges I'm pointing to this "web server logs containing your IP address".
Well, yes they have your IPs but do you think when you withdraw to a non-custodial wallet and send it to another wallet they know if you still own the BTC or sent it to another guy or bought something online? Do they still know your IP?

Blockexplorer itself only shows the node IP, not the one who sent a BTC you can protect your privacy by having your node and use it as your Electrum server can be also a good alternative you hide your IPs or use a non-custodial wallet that supports TOR it can also hide your IP.

If you know everything to hide your IP why buy directly on the centralized exchange you can use the decentralized exchange to buy BTC and hide everything. Bisq exchange as a sample it support TOR or use eXch it also supports TOR.

I see the word "private" on the descriptions written by thousands of Bitcoin users ever day. They are obviously wrong, but that is clearly the perception of Bitcoin.



What about my post is misleading? Are you saying--unlike most of the responders here--that Bitcoin does not present a privacy risk when you use it in its raw form? Are you saying it is anonymous?

Or maybe you're planning on showing to everyone in public on how confused you were about bitcoin, if you don't know much, then its better to take time in making some findings, this is not about how we feel or think, its on what we know as a reality concerning the needs of the people when it comes to finances, security and privacy.


And what has this got to do bitcoin not being anonymous or why it should be dangerous for use, if you don't have an idea on what bitcoin is, its better to remain silent than throwing controversial thoughts that could be misleading to those ready to learn something new about bitcoin when they come across your post.

No. Censorship resistant isn't the same as "private". For example, do you see the word "private" on https://bitcoin.org in the main description of Bitcoin? No - the only part is where they give privacy tips actually, and that are the techniques I mentioned (no address reuse etc.).
If some influencer tells people Bitcoin is "private", this is of course is wrong, not good and it happens, but I don't see this very frequently. At least not without the usual warnings.

Targeted ads do not need a link to a complete identity to work. The IP address and cookies are effective for targeting even without knowing more about you than the websites you visit. In some cases the IP address is linked to an email address for example, if you register at a site participating in an ad network, so you can also get advertising mails from different companies (which is forbidden in most countries but it happens), but in most cases it's not more than that. In the case of "blackhats" that may be different, but that's not the normal case of "targeted ads" you see everywhere, as a "triangulation" isn't that important for them. For marketers your real name for example isn't important, the interesting thing is what you could buy.

Let's say such a profile is now connected to a Bitcoin address or a group of addresses. The question is: could a marketing company really profit from that? They would need more information, for example if you use the Bitcoins to buy stuff. But the demographic of those holding and spending Bitcoin, which would be attractive for this kind of targeting, is unfortunately small. Traditional targeting via IP address and cookies is probably cheaper and equally effective.

What I mean is that you need to be wealthy if you are targeted specifically because of your Bitcoin address, in other words that the Bitcoin address represents a "value for itself" for the marketing company.

For marketers it's much more important to know your interests than a Bitcoin address you use.
The only case is the "5$ wrench attack", it may be of interest for criminals if someone holds e.g. $20k in Bitcoin in their city, which is not someone "very wealthy" but let's say a lucky middle class guy. Such attacks have occurred, but they're not very frequent, because they're difficult to organize. A fiat-based scam (e.g. via bank account hacks or Whatsapp scams) or simply robbing your physical fiat wallet on the street is much cheaper and more effective.

I'm not saying that Bitcoin is immune to those kind of attacks but I think you dramatize the issue as if it was an existential problem for Bitcoin. Just like this recent FUD attack fueled by some hedge funds about the "2140 problem"

Edit: Just to add: your title is completely wrong, Bitcoin is not a dangerous privacy issue. There are privacy issues with Bitcoin like with almost every other technology.

As much as you made some really good keypoints which I tend to agree with, I will still have to say that you are not entirely right, and the reason Is very simple, the fact that a person can own and manage as much bitcoin addresses as  he or she possibly wants, tells you that it's pretty difficult to track all addresses to a particularly person. Like for example, I personally have more 10 different and active bitcoin addresses, and even if one or two of those addresses can be linked to me, there is no way the other 9 or 8 addresses can be linked to me as well, because I recieve transactions from several people, and send transactions to several people as well; from those addresses.

Like I believe some other users must have mentioned, the only way or reason why tracking bitcoin addresses to real humans became quite possible is due to patronage to centralized services where kyc verification is mandatory, outside of this, it was never possible to link a bitcoin address to a particular person, except someone you know in person and have their address.

You are correct, Bitcoin transactions are not private by default, you have to create a collaborative transaction called a 'coinjoin' to be anonymous. It's easy to have complete privacy on Bitcoin when you use Wasabi Wallet or BTCPay Server's coinjoin plugin: https://mempool.space/tx/fc13786aa9a350d06e7f63c69e7989917981c689f284a7eba3130cde958e23bb

Are you kidding me? That's almost entirely how it is promoted to average consumers.

Yes, hardened criminals and those living under oppressive governments whose lives are in danger know these things well, but for the average US consumer, Bitcoin is mostly seen as privacy-enhanced.


I never intended to try to solve the problem here, only to point out that there's a problem.


Google it. Using the internet without a VPN is... not safe. Once a single entity connects your IP to your identity that can be (and often is) shared widely. All of this is done with data marketplaces and so forth.

When I first saw this thread title I baffles a little until i read through the entire discussion and I discover that ops have made alot of controversial statement about bitcoin and it privacy provision because in all his statement he failed to define what decentralised network means to him and how best to interact with centralised service without losing our identities.


This is the first time I am hearing of the statement that IP contains and transfer our identities, although I know of the traceability of IP but I haven't read where IP contains users identity that he has shared online and on the Internet before.

You're partly right but I don't see any "danger" here.

In first place, nobody really promotes Bitcoin as a "private" means of payment anymore. That was the case perhaps in 2011 or so. It is generally described as "pseudonymous". It's as "private" as social media is -- i.e. if you don't be wary to protect your privacy, everybody will be able to link a Bitcoin address with an identity, like if you publish your identity in a social media platform or forum.

In second place, you still can transact privately with Bitcoin, if you are strict about not publishing addresses and also don't reuse them. It is for a purpose that Bitcoin clients try to enforce the "no-reuse" policy to the users. And then of course there are techniques like CoinJoins and atomic swaps which can even make already "de-anonymized" funds (e.g. because by mistake you published an address online) private again, even without the intervention of mixers and tumblers.

Third, linking complete identities to addresses isn't that easy. You also need access to a database connecting different parts (e.g. full name, e-mail address, phone number) of the identity. These lists are of course sold in darknet markets, so criminals actually can have already access to some tools of some people (but not of the entire population normally). That's why everybody already warns about the "$5 wrench attack". But for companies, to purchase these lists for marketing use would be very risky as this is of course against data protection laws. It's also a cost issue: I think a marketing tactic based on the identity of an address would only make sense if the person behind it is very wealthy. But you may have to investigate a lot to find a wealthy person which is at the same time not wary about the privacy issue.

That is very correct and in further essence how bitcoin is privatized is that you can process your transactions on the decentralized exchange wallet without exposure of your identity unless the user executes the transaction using the centralized exchanges networks.
So if a device IP is being compromised, it does not entangle with the bitcoin transaction so if being tracked with as a course of insecured IP, it definitely has no linkage with the bitcoin transaction as bitcoin already is tied on its private and decentralized blockchains.

I never implied it was. It was just an example of a similar issue. Please re-read my post (?).

It's not the same issue, mate. Bitcoin's privacy problem isn't related to IP addresses. The real reason people's privacy is compromised is because they use centralized systems. When you sign up for a centralized platform, you have to give away personal information, which eliminates your anonymity. This means authorities can trace a transaction back to you if they want to.

Bitcoin has always had privacy limitations, which is why solutions like CoinJoin were introduced early on to improve privacy. tumblers have also played a crucial role in enhancing privacy for Bitcoin users. What you should know is that bitcoin creates a decentralized system for transactions and doesn't mainly focus on privacy. Coins like xmr monero is what we term as a privacy coin.

I would like to introduce a topic that I have been thinking about for a while.

Most people assume that because Bitcoin transactions involve anonymous numbers, and not a real name and other private information, then Bitcoin is perfectly safe from anybody knowing of your transactions.

However, Bitcoin is a public ledger, and every transaction is available to anybody on the Internet.

For me, this akin to web server logs containing your IP address: it's just a number, right? That's what everybody thought when the internet was new, but we all quickly learned that your IP could be "triangulated" to your real identity: once you used that IP to connect to something with your real identity, then the IP and the identity could be linked, and thus your IP was essentially the same as using your name and address for every single server access.

The advent of Monera and Bitcoin mixers would seem to verify my thesis here: why would these things have been invented and have become popular among those who are serious about their privacy (for whatever reason) if Bitcoin was not a privacy issue?

Bitcoin has the same problem IP addresses always had: if you used your personal information anywhere along the chain, the entire chain can now be attached to you.

How long will it be before somebody builds an app that allows you to put in a Bitcoin address and pop out a name and address? (Pardon my ignorance if this is actually already an available product).

How long before marketers start using this data to target ads at people? For criminal networks to start using this to target people?

Millions of consumers seem to believe, falsely, that using Bitcoin makes their transactions private. And that false information can be very dangerous since it will give people a false sense of security.

Bitcoin being a private means of transacting is a dangerous falsehood that needs to be corrected.

Am I wrong about any of this?