Topic: Privacy Tips: Don't send round amount - page 2. (Read 794 times)

Send instead any other amount you can afford to sacrifice. In my view, if you are advocating for bitcoin fungibility, you should support voluntary donations to miners because fees you pay to get your transaction mined are arguably the only natural way by which bitcoin gets cleaned of all taint nonsense. No other mixing solutions are able to provide the same fungibility guarantees.

Yes, all bitcoins are equal, but you probably don't want your employer to know on what things you spend your Coinbase withdrawals, or do you believe this information cannot be used against you just because bitcoin is fungible?

Again, this has nothing to do with your belief system, the undisputed fact is that this "perfectly fungible change" is not as private as the funds that had gone through mixers.

In some places having bitcoin in your possession already makes you a criminal, but what if one day all honest law-abiding citizens in your country are ordered to hand over all bitcoin holdings to the government, how many of them will want to turn into criminals?

If you send 0.005BTC to miners, it's gone. If you send it to cold storage, you can always use it later when needed. If you don't want to use it, don't use it. But things may change in the future, and as long as it's in cold storage, nobody can know it's yours.

I think we have a different approach: I don't believe in "undesirable inputs" because all Bitcoins are equal.

This sounds like the religion of "taint". I simply don't believe it exists

Wait what? The topic was about privacy, not about hiding crimes. If you stole 1.01BTC, then indeed I can imagine you don't mind sending 1% to miners if you believe that's what keeps you out of jail, but I was assuming we're talking about honest law abiding citizens why just don't want to world to know their private financial details.

100$ is just a round number used to explain sending of round numbers; you can pay less if you wish. I understand you can somewhat obfuscate your transaction history by going off the chain, but honestly don't understand why you consider it a good practice to move toxic change to cold storage. Assuming there are many effective ways to get rid of these undesirable inputs, why would you want to keep it at all? Given the state of affairs that even open-source software developers nowadays don't mind infringing others' privacy to make a quick buck, let alone blockchain surveillance firms, this is highly unlikely that ten years from now that will change and that toxic change will magically transform into something more private. No, they will wait until you make a mistake spending your criminal outputs in the wrong way.

Right. To construct a fake CoinJoin transaction, one should use inputs from different addresses that don't share history with each other, otherwise, it is trivial for an outside observer to figure out that this was an attempt to mimic a heuristic.

I suppose it depends on how much blockchain analysis Kraken is doing, or how much data they are sharing with blockchain analysis firms.

If you withdraw via Lightning and then simply close your channel to get those funds back on to mainnet, then Kraken will obviously be able to see the final destination of your Lightning payment and the channel close transaction, and could link all that together. If you withdraw via Lightning and then send those Lightning funds to some other exchange service in order to receive mainnet bitcoin back on a completely separate and unlinked address, then they will have a far harder time tracking that, although not impossible with enough data and resources.

This could all be improved by the implementation of something like rendezvous routing, so Kraken doesn't know the final destination of your Lightning withdrawal.

Same. I'm a big proponent of avoiding privacy leaks from change addresses by simply not creating any change. Choose your outputs wisely, and buy a little more or a little less than you intended to match an output almost exactly to the payment amount, with any extra left over on the fees.

I'm not sure.

So withdrawing LN BTC from kyc exchange (let's say Kraken) and converting it to BTC mainent, exchange would know that BTC is now connected with you and your kraken account?

I never tried doing that for online purchases, I guess I don't like throwing away money, so I mostly sent exact amount of money.
I know people who made mistake sending wrong amount of coins, adding extra zeros and they got refunded after making complains.
For small amount of sats I thin they consider it as a standard tip, like if you give few extra buck when you buy something in coffeshop.

Are there any payment processors which watch for exact values and would take issue/not correctly identify your payment if you pay extra? There are obviously plenty that completely mess up if you transfer less than the invoice, but what about if you transfer more than the invoice?

Depends what you are buying I guess. A grocery shop or something similar in which you've got multiple smaller items in your basket is very unlikely to end up at a nice round price. Buying a single expensive item though, such as a phone, laptop, large appliance, is far more likely to be priced at a nice round $399 rather than $394.61, or 0.02 BTC rather than 0.019847539 BTC.

Now that you mention it: who does this? Usually, goods don't have a round price. I can imagine people use round numbers when sending money to an exchange, funding their online casino account, or when topping up their hosting balance (probably a round number in dollars), but not for buying stuff.

With KYC: yes.
Without KYC and on Tor: good luck to them

Before I realized the privacy implications, I indeed used to like round numbers. It's a lot easier to type and remember them. And I'm probably not alone in this.

Even some centralized exchanges are using Lightning for withdrawals and deposits, so it would be interesting to know if they can somehow track you and connect that with your identity.
So far I didn't see any way how they can do that, and we can always exchange LN back to bitcoin in different amount of coins.

I think there is something in human nature that likes rounding numbers, but you can always donate few more sats and donate when you are paying for something.
If something is 0.01 BTC you can pay something like 0.010018642 BTC or any other random number, and I think this little trick would also work.

Even better than this is to make your change a round number and your payment not a round number. If you are buying goods, can you throw a couple of extra small things in to your (physical or electronic) basket to make the final amount a non-round number? If you are paying for a service, can you buy some extra add-on or pay for a few extra days to make the final amount a non-round number? If you are paying a friend, family member, donating to a cause, etc., then you can always just throw in an odd number of spare sats. Rather than just make everything a round number, you can actively send blockchain analysis down the wrong path if you are smart about it.

This provides no privacy at all. Any blockchain analysis company will obviously trace funds backwards, and if they only have to go back a single transaction to see all your 0.2 BTC inputs being created from the same output, then it is trivial to link them all together.

Paying $100 to miners seems like a waste of money for a very small potential improvement in privacy. There are better things to do with that amount: send it to a paper wallet for long-term storage, or use an instant exchange to turn it into LN funds.

I didn’t appreciate their privacy score but I have shared one of their metrics/criteria which is helpful or one of the very first steps toward having some nonidentical tx. It doesn’t necessarily confirm everything is secured but it's one of the tricks of course. Of course it's easy to make them fool since you know their criteria.

Blockchair's privacy-o-meter is highly inaccurate bullshit and should not be seen as a measurement tool to determine how good or bad you are at privacy-enhancing techniques. If you know precisely how blockchain surveillance firms work and what patterns and blockchain transactions heuristics they are looking for to cluster address, you can fool and confuse this meter each time you are making your payment. The unspoken rule is if some of the outputs are a round amount either in bitcoin or fiat currency terms, it is a payment. Period. Take advantage of this stupid heuristic by making ALL your outputs a round number and sending the leftover to miners. What will Blockchair say about this kind of transaction? The explorer is probably going to be confused and assign your transaction a "green" status as highly private. Or you can construct a fake CoinJoin transaction in which there will be several inputs of equal size and several outputs. For example, you have a UTXO with 1.01 BTC, but you need to make a payment of 0.2 BTC. First, you make a transaction with 5 equal outputs (0.2 BTC) and 0.005 BTC going to miners. Secondly, you create a transaction with 5 inputs + 1 input (0.005 BTC) and five outputs of 0.2 BTC. 0.005 BTC goes to miners as fees, and one or several or all five outputs can later be used as payment.

Pretty much all of blockchain analysis is guesswork. If they are looking at a transaction they are interested in and cannot figure out which output is change and which isn't, then they will absolutely be using every technique they can think of to try to shed some light on the situation.

If you are the focus of some blockchain analysis investigation, then they probably already know which fiat currency or currencies you are likely to be transacting in.

True, but that's a whole lot of guesswork. Looking at the value of one output, you might say this is probably the change because it's the equivalent of $/€/£43.28, while the other entry of approximately $/€/£20 is the amount that was paid. But maybe that $/€/£43.28 equals exactly 1000 units in my local fiat currency and blockchain analysis got it all wrong. 

Blockchair even does it for you, appending the value in a fiat currency of your choice at the time the transaction was made. Here are a couple of examples I pulled just now from the most recent block:

https://blockchair.com/bitcoin/transaction/e5e028807b3b7b2c5cc94f97769a1ddb7b8b487f6ded8c4fa8fe1013006fc131
One output of $5 exactly, another of $1,083.99.

https://blockchair.com/bitcoin/transaction/5c4b4cea7c01f99541169ce83e97309f32c9b8bc8b0c106af100b22bae8ddf48
One output of $2.99, another of $2,121.04.

Looking only at the bitcoin amounts - no round numbers. Looking at the fiat amounts - completely obvious which is payment and which is change (even ignoring the large discrepancy in value between the two outputs in each transaction).

If the amount in dollars (or euros or any other major currency) is a round number, it's trivially easy for a block explorer (or anyone observing the transaction) to check and they'll assume that's the amount you sent, and the other amount goes to your change address.

You are right but that's not the case all the time of course. There are also fixed BTC paid campaign. And also, I have paid 0.0025 BTC. Both are identical of course. People transacting with mutual contacts don't bother sending a few sats higher which make a round figure too. I have seen this many times, even in my currency exchange service, I received some round amounts which should be little less. Anyway, most of the times the payment should be somewhat not a round figure, having an on chain analysis would do the calculation. I will look if such data is available. However, you should know that there are a lot of chips (1 mBTC, 2 mBTC, and multiplier)- https://bitcointalksearch.org/topic/privacy-how-many-bitcoin-chips-are-out-there-5410924

A lot of the services and goods you pay for have a fixed value in USD, EURO, or some other fiat. So the amounts you send won't be round, and depending on how you earn your bitcoins, the UTXOs in your wallet aren't round either. Let's take signature payments as an example. You are mostly paid in a fixed USD amount converted to BTC. Therefore, it's unlikely that you will receive exactly 0.01 BTC. Getting 0.00991 BTC or 0.010005 BTC is more likely. And then if you are paying someone for some services, it's again usually a fiat amount converted to BTC. 0.00246792 BTC is $50 right now. Nothing round about that. 

Well, this depends. If you are consolidating multiple outputs in to one, then yes, this is bad for your privacy. But if you are sending the entirety of a single output from one address to another, this can be very good for your privacy since you avoid creating any change at all. An outside observer can't tell if you've paid someone or just moved all the coins to another address you own.

If paying from a native segwit address to a legacy address, then you've got the option of sending the change to either a nested segwit or now a taproot address instead, which will achieve the same result of confusing any blockchain analysis while only incurring a very minor future fee increase.

The criteria they use are actually very well defined: https://blockchair.com/api/docs#link_M6. Knowing what they are makes it very easy to figure out how to fool them, although there is of course no guarantee that blockchain analysis companies are using similar criteria.