I've read that it's a good security practice for a newbie after acquiring some bitcoin to put all your coins in a new wallet that has never connected to the network. Can you help me understand what good that is, because I'm assuming you can't do a transfer between wallets offline, right?
Seems to me the very act of sending money from wallet #1 to wallet #2 leaves a blockchain fingerprint… so if Evildoer Eddie was involved in an early transaction with you, he can figure out any wallet address you've moved money too as well, right? And if you're a distant protester worried about the computing power of NSA, I imagine they can follow your personal bitcoin moves rather easily after a pressured vendor or exchange contributes the first wallet address to their cause.
Just an aside: I find it interesting that in the course of its academic effort to test some hypotheses of cracking anonymity, a UCSD/GMU paper (Meiklejohn et al.) indicates the researchers scoured bitcointalk.org posts for tips on addresses associated with major thefts or now-defunct services. (Just because you're paranoid doesn't mean they're not watching you.)
You've touched a raw nerve there Terry, half the bitcoin community thinks the network is anonymous, the other half thinks it isn't. Personally, it's my view that if every transaction is publicly verifiable on the blockchain, then the possibility exists that they may be anonymous to the extend that people may not know which person controls a certain address, but I don't think that transactions cannot be traced. I think if someone has the time, patience or resources to trace any bitcoin transaction, I'd assume that was possible.
It's like anything in life, if you've got something to hide you'll spend part of your time looking over your shoulder. If you've nothing to hide, then there's nothing to find.
As citizens in a free society (not all of us, but most of us), the governmental contract is that we supposedly gross up our right to security to the police, armed forces and, inescapably, the intelligence services. That suits me fine as I've nothing to hide, but for many on this forum who are crooked, criminal or dishonest, it causes them grief.
Be wary of many of the answers you receive on this thread as, like this comment, it reflects the bias of the author.
"Dae richt, fear nocht"
(Old Scots: If you do right, then you have nothing to fear.)
