Topic: Can you stay anonymous with Bitcoin (Read 1856 times)

The pool will likely have a lot to say about you. VPNs might help, but then you need to trust them. How do you pay? Is it a honeypot? Tor might be an option, but latency comes into play. If going solo, variance is a bitch, plus you need to worry about your ip address exposed again.
...and government and other agents, too.
Yes. This is an important and often ignored detail.

Overall, it takes careful planning and hard work in proportion to the value of your privacy as  a target. My effort would be much smaller than that of a politically exposed person or a big-time drug dealer or a terrorist.

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1) Mine the bitcoins ("create" them)
2) Transact cash (untraceable) for bitcoins, via a service like localbitcoins.com which brings buyers and sellers together.
3) "Clean" bitcoins.  Someone may be able to infer that you initially purchased some amount of bitcoin and sent it to some particular public address, but from there a seed of doubt can be planted.  "Plausible deniability".

If you meet someone and pay cash for BTC and send them to a Brain wallet.

Buy a cheap machine, set it up with a Linux distribution disc.or use on the fly encryption,
grab a copy of the http://Brainwallet.org webpage.

Another option is https://www.bitaddress.org/

Transfer it over to your machine. If you make sure this PC never goes online, you can create a series of Addresses.     Let's say you want to save 100 BTC in blocks of 10 BTC.

On this machine, that you NEVER put online, you use the Bitaddress.org webpage (it works in offline mode)
 go to the Brainwallet Tab and Create 10 Bitcoin addresses  for example below.

(This-Is-My-BTC-Addr-#1)

Add in some Personal details too, like a Birthdate, part of a Tel No, national insurance no etc etc

So it becomes

(This-Is-MY-13101958-BTC-~Addr-#1)
(This-Is-MY-13101958-BTC-~Addr-#2)
(This-Is-MY-13101958-BTC-~Addr-#3)
(This-Is-MY-13101958-BTC-~Addr-#4)
(This-Is-MY-13101958-BTC-~Addr-#5)
etc etc etc

This must be something memorable, something you will remember in 5 years time.
Once you've created it, practice at least once each day remembering the password in your mind until you can remember it like your tel no, or Wife's Birthday ( or even better than that, I mean this is important stuff).

Obviously, try to make em a bit more obscure, use upper, lower case, numbers, something personal and at least 20 chars including special chars like commas etc.

Even though each pass phrase only differs by one character, Each one of those will give you a cryptographically unique address that you can send 10 BTC to.

So long as that Machine NEVER  goes online, you can be very sure no one knows the base Pass phrase you use to generate all of your Bit coin addresses.
Simply by changing the number at the end generates a cryptographically unique BTC address everytime, which means you can have as many addresses as you like, stored in your head.
As long as that base pass phrase is never compromised and only ever entered on a machine not connected to the net (or under surveillance with CCTV, Keyloggers, Screen scrapers etc, your BTCs are Safe.

Any time you want to spend 10 BTC, just go to your, or any offline PC, re generate the Private key with your clint side copy of bitaddress.org, and copy the Private key to USB or turn it into a QR code, scan  it into your Android or IPhone or transfer it to another online PC so you can import that Private Key into a wallet.
Even if you are compromised at this point, the worst thing that can happen is you will lose those 10 Bitcoins.
The other 90 are secure because even though the only difference between your addresses is generated by a passphrase that only differs by 1 character, the beauty of this system is that each Public and Private Key so generated are cryptographically unique, so you can effectively carry dozens or hundreds of addresses in your head, simply by remembering one passphrase.

Of course if anyone finds out you have an address generated by the phrase
(This-Is-MY-13101958-BTC-~Addr-#1)

Then they will guess you may also have BTC stored at an address   (This-Is-MY-13101958-BTC-~Addr-#2) etc etc    Thats why it's important that machine never goes online and you absolutely trust the machine you're using is secure and not under surveillance in some way.

As an extra security, try to have a couple of systems set up like this so you can never lose your entire BTC hoard, even if someone installs CCTV in your room to video what your typing, and yes, we do have to be that paranoid, Bitcoin security is up to us, there is no Bitcoin bank who will refund us if we are compromised and have our coins stolen.

One slight weakness off this system is of course that if you are ever caught entering your base address, eg
(This-Is-MY-13101958-BTC-~Addr-#1)

Then, potentially, you are compromised because they'll work out you have a #2,#3,#4 address.

A further refinement might be to replace the 1,2,3,4 etc with something else (perhaps part of another easily memorised [to you] public key hash.
That way you have a two step security system, they have to compromise your main base pass phrase, PLUS the phrase you are now substituting for #1, #2, #3 etc to create your range of unique, easily regenerated Bitcoin addresses.

Yes, start with anonymous internet connection, and if you do all right you may stay anonymous

what if 1 uses a VPS to conduct transactions?

just a random idea.

 Can you stay protected with your computer ?
keep the hackers out of the race!

 h h

Thanks all for your replays an thoughts, especially niko thanks.

Bitcoin is more pseudonymous than anonymous i believe, due to the blockchain

Well in terms of your offline wallet i think it is anonymous but if your talking about online wallets and moving bitcoins, cashing them, buying items with them then you lose that anonymity.

http://www.pcworld.com/article/2047608/bitcoin-offers-privacy-as-long-as-you-dont-cash-out-or-spend-it.html
http://www.businessweek.com/articles/2013-08-27/bitcoin-may-not-be-so-anonymous-after-all

Sense of scale is always welcome, and it is more than welcome in discussions about anonymity. Corporate and governmental interests are powerful enough to bomb whole countries into ashes, to fly to the Moon and back, to assasinate, to build amazing structures... It is oblivious to assume that anonymity can be guranteed against a powerful interest.
In other words, the ability to perform an action anonymously depends, among other things, on what toes you are stepping on in the process.
Moving on to Bitcoin specifically, most of "anonymity" is just an empty slogan by the uninformed and misled. Do not confuse the initial obscurity of a new technology with anonymity: law enforcement, marketing firms, and DHS/KGBs of the world will eventually catch up and start using it to their advantage. Bitcoin can do miracles for them.
You could certainly take steps that obfuscate your identity to some extent, much like you could devise a network of companies, cash deals, and offshore bank accounts that makes it hard for someone to determine your identity, or at least that makes it hard to prove beyond reasonable doubt that you are that guy. Still there is nothing inherently anonymous about Bitcoin or cash. It all depends on how you use them and how much you understand them, and on how powerful your enemy is.

Yes.  Depending on how you acquire it, what you use it for (and what you mean by anonymous), you can keep your bitcoin usage completely anonymous.  Keeping your bitcoin usage COMPLETELY anonymous isn't an easy thing to do, and requires you put a lot of trust into others that may use you anonymity against you to steal from you.

In my opinion i don't think so. There are too many digital bread crumbs when moving bitcoins around especially when trying to withdraw them for cash.

You can be anonymous when exchanging bitoin for fiat. If you sell you bitcoin to someone in person (localbitcoins.com), then you can turn your bitcoin into fiat and vice versa. I think this would be hard to track back especially if the person you transacted with did not know your identity.

By trading BTC in person, you can obtain bitcoin relatively anonymously.

If you use any service such as Coinbase, any transaction and subsequent transaction are no longer anonymous.

the shifting itself doesn't help you, as someone can follow each shift and see your 100 BTC move from address to address until it finally arrives at an address without further movements. even if you write a software that moves it between 100 addresses and even splits and adds up the coins again in the process, someone could write a software that tracks all the movements until it arrives at the target address (or maybe it already exists). if feds are tracking it because you stole that money they might still catch you as soon as you try to exchange your money into a national currency.

the question i asked myself, however, is how they would prove the identity of addresses that played a role in the process. e.g. if i would steal a wallet from some random victim on the internet and move the money in it to address 1 which i created a separate wallet for. next i move it to address 2 and from there exchange it to USD using Mt.Gox. also i delete the wallet for address 1. address 2 i also post somewhere on the internet asking for donations.
now if i get caught by the feds (because they traced it to the Mt.Gox payout to my personal bank account) they might be able to find me and also prove that what i exchanged was originally stolen money. BUT: what if i state that i am only the owner of address 2 and i don't know who the owner of address 1 is and i simply assumed a donation?
of course if caught i couldn't keep the stolen money but they also couldn't prove me being the original thief (because the owner of address 1 stays unknown).

What if you keep shifting btc from wallet to wallet

Welcome BTC1...

That is not completly true..


There is a really good project that has been presented by gmaxwell called CoinJoin that might lead to a more promising privacy layer... Check it out:

https://bitcointalksearch.org/topic/coinjoin-bitcoin-privacy-for-the-real-world-279249

Your identity can remain anonymous. ie. Name and personal info. However your wallet and computer can be found if you mine in a pool or ever make a transaction. Hope this helps

The only way I can imagine that no one has your wallet details is if you mine it yourself and never, ever spend it - no trades with anyone, no purchasing or selling bitcoins either. I could be wrong though, but I don't think it's possible to be 100% anonymous.

Bitcoin is still a lot more anonymous than other payment forms though.