Topic: Could bitcoin be made more anonymous? (Read 1643 times)

Yes but while using Tor you still have to use an exit node and they can all be monitored.  Maybe if they put the entire blockchain within the I2P network it could make blockchain transactions even more anonymous then using a public IP address or a Tor exit node IP address.

BTW, Electrum also has a way of prioritizing which address(es) coins are taken from (you need to set the client to advanced mode).  That helps a lot.

However I would argue that a system where, by default, if I send 5BTC to a seller along with my real identity for shipping purposes, they now potentially know not just who I am, but also every single payment I've made and received from that addresses and any others linked to it, is not viable in the long term.  Moms and grannies should not have to understand how Bitcoin works in order to avoid disclosing their past transaction history or savings balances.  Mixing needs to happen somewhere in the client or the protocol, transparently and by default, for Bitcoins to ever be used by nontechies with a minimum acceptable degree of automatic privacy.

There was a presentation at the London conference from a couple guys in Russia which referenced recent papers with algorithms that supposedly would allow proper anonymity at a node or protocol level.  Not sure whether they intended to retrofit that onto Bitcoin or start a new currency.

I wouldn't say that full anonymity is a high priority issue at this time given that Bitcoin is still beta software used by mostly tech-savy people who understand the protocol and concepts like mixing.  However for safe usage by naive people, the involuntary leaking of information is something that's eventually going to have to be tackled, because it's definitely going to come off badly when compared to legacy banking mechanisms.  When I buy something today via credit card, wire, or check, the seller does not (in theory, at least) get any intelligence as to where my funds came from or what other entities I've sent money to.

use Coin Control: https://bitcointalksearch.org/topic/--24784

well yes. but bear in mind, that there is a tradeoff between several sides: anonymity, trust, speed, centralization, etc.

what you can do right now is to diminish trust in favor of anonymity. this would be possible by sending the private key encrypted via pgp email and immediately sending the coins to another address, for example. but that's not the tradeoff bitcoin itself has chosen.

I think making it more anonymous could be counter productive to the long term health of bitcoin.

You have things like Silkroad that already use bitcoin for it's high levels of anonymity, not really the sparking demographic you would prefer to attract, but it happens. The general public, the non techy users is the ideal demographic to get using bitcoin, that would help a lot by making bitcoin easier to use for every day use.

Many scams have occurred with very large amounts of bitcoin, in many forms, a higher level of anonymity making it harder to know whom they are wouldn't be a good thing, it encourages the worst in people when they feel like they can get away with such crimes because you don't know who they are for sure.

I would never want to lessen the anonymity of bitcoin, I think it is fine as it is, there are plenty of methods to both prove who you are and inversely obfuscate your identity. I wouldn't want to add to the options that the those who give bitcoin a bad name, in allowing anyone to obfuscate their identity more, it could offset the balance.

OP,

Recent implementation of hidden services support in the main client is already a good step towards better anonymity. I hope lite clients start supporting that soon too.

It's also possible to use some level of multi-party computation as described by Meni Rosenfeld here. Such protocol would allow p2p mixing of coins, and provide a great level of anonymity. It hasn't been implemented yet, probably because it's not that simple and people have other priorities right now. But if demand gets strong enough, it'll be done. (you may always start a bounty )

Such p2p mixing behind a darknet would already be good enough for me. If you want even more anonymity than that, you might get it with Open Transactions cash-only mode, but then you sacrifice decentralization - OT requires servers. In cash-only mode, not even the server can see whom you're transferring your money to.

I'm def not saying if you just go and use it you are anon. It's just that Bitcoin (the protocol) doesn't require you to reveal identity. Actually not revealing your identity is on you/your software provider/your girlfriend/whatever in other ways.

I still feel like I'm not being very clear. But it isn't possible for Bitcoin to be any more anonymous. There isn't such a thing beyond not requiring you to break anonymity. Your browser, your ISP, your friends even your particular Bitcoin software might screw it up for you, but that's not anything Bitcoin can change.

Someone could make a Bitcoin tx by mail proxy/mixer. You send them a raw tx made out to their bitcoin address in the mail and a note about what address you want paid and they send it less a fee. But the mail will be traced back to you etc etc. so see? It's nothing to do with bitcoin, it's a general problem of communicating carefully.

Somewhat disingenous fob off. In any practical network-connected application bitcoin is at best pseudo-anonymous and at worst a public trail of every transaction you choose to do with bitcoins.

Theoretically maybe it's great ... in practice it sucks for anonymity.

Bitcoin doesn't require your identity. It perfectly lends itself to anonymity theoretically.

Bitcoin can be absolutely anonymous: Automatic Coin Mixing Idea and P2P coin mixing

I know man, but I am wondering how much bitcoin lends itself to anonymity, and how much it theoretically could

You don't need to identify yourself to use Bitcoin. Now you (and any developers) are free to be as careful as you want. It's really not a bitcoin thing.

Anonymity is hard.  And the software can't help that much, and still act like people expect it to act.

One thing that I would like to see is if the client could try very hard to make all transactions to two or three addresses in roughly equal amounts.  Right now, if I send 1 BTC, it ends up being 2 outputs, with the second one being very obviously change returning to me.  But, if I went to send 1 BTC, and got 1 BTC back as change, or 2 transactions of 1 BTC each as change, it would be slightly harder to understand and track.

Another option is making an automatic mixer in each node.  Sit up and pay attention, this might be good.  (Or it might be crap, you tell me.)

Say I want to send 1 BTC.  Right now, my node makes a transaction that redeems some inputs and makes two outputs, one to the destination address, and one back to itself.  What if it knew that someone else on the network was collecting transactions for a mix.  The node advertising the mix would collect a bunch of outpoints, build a sendtomany using the appropriate modifiers, then send it back.  The nodes that wanted to participate would get copies of that transaction back, verify that the outputs it wanted are in it, and sign on with their amount.  When the ad hoc mix node got all of the signatures back, it broadcasts.  It would need a somewhat short timeout so that it can try again if someone fails to sign.

Everyone can see that a bunch of people all pitched in to make a bunch of payments, but no one knows who was paying for which output.  Be careful with change, and use tor.

Also you can run it through Tor (now there is even Tor service support). It would be cool if the protocol were eventually obfuscated in a way similar to the recent research makes Tor look like Skype video calls. Given that the blockchain is public the best would be to use a mixing service (I think there is research into better types of mixing services but I'm not too familiar with them), or something like OpenTransactions which would allow for an anonymous digital cash "on top of" Bitcoin.

The tricky part of achieving the best anonymity possible is the need for "change" addresses as careful analysis of tx's can end up deducing that certain addresses belong to the same owner.

For the highly technically proficient user the raw tx API makes it possible to control exactly which addresses are being used in a tx, however, this is not something for any average user (and therefore won't help in increasing general adoption).

I think multiple wallet support will probably be of some help here for the general user (is already in some clients and I think is planned to eventually be put into the Satoshi client).

Could it be made more anonymous than it is now? I think pulling out all the stops on anonymity etc would increase adoption.  Could it be made more anonymous, or is this impossible considered how it works?