Topic: Will the high volume of transactions make Bitcoin more anonymous? (Read 288 times)

If there's hundreds of millions of transactions every day (which doesn't sound very feasible to me even if scaling is achieved because it would be like ~5000 per block multiplied by 144 so it would be ~75000 transactions per day), then chances are that hardware will have improved to some point where node CPUs can actually verify the transactions that fast. But then that would mean the blockchain analysis would scan proportionally faster as well. Why? Because that's how Moore's Law works.

Otherwise what you're looking at is either a centralized scaling model which BA can try to poison, or in actuality, there continues to be few transactions a day, which continue to get fingerprinted.

Blockchain analysis companies already have advanced tools to track and link addresses to potential identities, even with a lot of data. The increased volume might slow down the process slightly but it doesn't make tracking impossible.

They will be easy to track if focused on the target. if the targets are many and don't know who is being tracked, that will not be easy to trace even with advanced equipment. Another question is? Who are blockchain analysis companies looking for? terrorist organizations, drug deals, or fraudsters? It will hard to keep track of it all if there is no name address who is being a specific target.

It's not possible to make a system like bitcoin that'll stay "anonymous". It is possible however to create a system with the potential to be anonymous under anonymous usage of it.
It mainly depends on how the user of the system uses the system; it's not enough for example to use Monero. (which by the way isn't anonymous).

About your question, it will just make it harder on a linear factor at best. or would it even?

Only if the transactions happen off-chain. On-chain, privacy techniques need to be exercised, otherwise it is trivial to de-anonymize a very large sum of the total Bitcoin userbase.

You're just relying in guesswork, with Monero. Yes, it certainly has less users than bitcoin, but everyone is nearly equally untraceable. This argument holds as much water as arguing that coinjoin users can be traced, because there are less such users, in comparison with all the non-private coins.

With millions of transactions happening every day, it might make tracking a single transaction more challenging. Time and volume could play a role in making it harder to track but it's unlikely to be impossible. As the technology evolves, tracking methods may also improve making it a constant cat-and-mouse game between privacy tools and blockchain analytics.

Difficult, yes. But not totally impossible. There’s definitely added work with how much transactions are happening on a span of a specific time frame and trackers would have to sift through all the irrelevant transactions to look for ones that are suspicious.

Many methods are available for bitcoin transactions to be tracked. They analyze blockchains, even can identify IP address and many more. Some are just really sloppy as they tend to not realize or remember that KYC exchanges leave records or that their addresses have been reused.
Mixers or privacy-enhancing platforms makes it difficult for anyone to track anything however not totally fool proof. Everything has a pattern and it can be traced with the right tools and the right perspective.

Companies that have tracking or are in the business in that sense probably have some filters in their programs that assign identities or identify possible scamming situations that could cause problems in the systems. More volume would just result in longer analysis time because it increased in data and was quite complex, but if time isn't a problem, I don't think it will be impossible to track.

I guess this thing will not happen. Because it will allow more spamming, and will not increase the number of transactions significantly enough. I think we will rather see single UTXOs, handling more than one person, and transaction joining. And of course, Ordinals blocked any block size increase for a while, and this argument will always be raised, if anyone will attempt to do so in the future.

And also with much less nodes than today, where you cannot download historical data, because there are not enough non-pruned peers, which will serve you that data.

You assume, that other people make their transactions in a proper way. But very often, it is not the case. For example: if you don't reuse addresses, but 99% other people do so, then by taking a set of transactions, and excluding address reuse, it is possible to find you.

Which means, that if you want to hide properly, then you have to get some statistics first, and see, what is the most popular way of using a given coin, and do it in a similar way. And then, the question is: if other people significantly degraded their privacy, does it really matter, if there are millions of transactions, if all of them passed through KYC?

Then just run a full node, and observe some traffic. There are many cases of address reuse, KYC, SPV nodes connected directly to you (so you can get their IPs, and connect them with their transactions), and so on. And for example Ordinals make it even easier, when people first publish some data on-chain, and then post on social media, that they own some monkeys.

Not to mention, that you can also group people by used amounts, address types, or even client versions. And many nodes, running 24/7, have some static IPs, so you can even check that kind of data.

Every day we learn something new. I didn't know if it was possible to change the outcome of TX numbers with some coding skills but who is Lauda? And what topic is the TX author talking about? Sadly, I can't visit topic=528291.

I'm talking about a hypothetical situation where Bitcoin is popular and widely adopted, with increased block size. Imagine current Bitcoin but with a huge block size and millions of transactions every day.

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My thought is following: If I send 1 Bitcoin to a mixer,  when there are low number of transactions, it's easier to even manually track because I sent 1 Bitcoin and then received it somewhere, the difference might be in some percentages but sure, if you received it days later, it gets harder to trace you. But I thought that if there are millions of transactions every day, it should be very hard to track my mixed coins because there will be many people who sent 1 Bitcoin and received almost the same on another address.

I'd love to know how Blockchain Analysis companies work.

More users in coinjoin, make more verification for find source of funds. 10 user = 10 verifications

Have you actually tried to calculate what transaction volume is currently possible?

The average number of transactions per block is somewhere in the ballpark of 4,000, let's be optimistic and assume 5k per block, i.e. every 10min on average. That's about 30k Tx per hour and just 720k per day on average!

How are you speaking of "hundreds of millions of transactions every day" when we're not even close to one million per day?

(Yes, I'm not looking at Lightning Network, so you aren't, too. But I don't think Lightning pushes the number of Tx per day orders of magnitude higher.)

Do you mean BTC --> XMR and then XMR -> BTC? If so, i doubt higher TX amount would help much. After all, blockchain analysis company usually have list of address owned by particular exchange, which can be used to narrow down tracking.

Common misconception, but the failure of maintaining privacy often lies with how the users handle it themselves. KYC is not the only exposure to your own identity, having transacted with someone that knows your real life identity will reveal who you are naturally. Unfortunately, this isn't something that can be evaded and you should be using CoinJoin or other similar methods to enhance your privacy.

The other being your choice of wallets and your ISP. Those are major areas for your privacy leak.

This is why we scale bitcoin for instant private cash like transactions on a layer and store value as we do today, then never go back to the other way of things. there's no reason to, everyone accepts BTC and becomes new standard. centralized bank system becomes something kids read about in history class. my children's children will know bitcoin as the norm. = we live by a gold standard no country owns or manipulates above any other another. And most importantly: NO PRINTING IOUs

As long as there is a market for such a "service" (that the blockchain analysis companies provide) they will expand regardless of how many transactions there are. It's just their workload that would increase with the increased number of transactions.

Just look up how much data NSA processes every day for instance. It is already in petabytes, that is 10¹⁵ which is 1000x larger than terabytes. The entire bitcoin blockchain from 15 years is still in GB.

Quite some interesting questions, but I'm not sure if you are trying to add the idea of mixers and other services that aids anonymity, or you are referring to the thousands of the transactions that we have in this current days.

Now, let me start by saying that people who are into Blockchain analysis and tracking of transactions most times have more than enough time to carry out a search, depending on the organization they work for, and the purpose of that search. And, we should understand that transactions can of course be monitored, but can never be traced to a specific user unless he/she uses a cex and has passed a KYC verification.

And, I don't think having 100 million Bitcoin transactions on a daily basis would make it tough for Blockchain analysts to monitor a transaction. The idea of monitoring a transaction that isn't associated with a mixing service is very possible, but it still won't be effective when the transaction can't be traced to any real world ID.

You can easily track bitcoin transactions, but you can't easily link bitcoin transactions with real people.

If you send bitcoin to a centralized exchanges where you complete kyc verification,  someone may track that address to your real life id, but that is not trivial

Bitcoin has a decent degree of privacy. And you can also improve the privacy using mixers of coinjoin or even some exchanges like exch.cx

Transaction volume has its limit by Bitcoin blockchain capacity and block size. The more easily increase thing is Bitcoin trading volume, not Bitcoin transaction volume.

Average transactions per block increases a lot since Segwit activation years ago and recent years with better adoption on Segwit. You can see list of blocks with highest transactions too with some are from 2015, 2023 but most are from 2024.
https://www.blockchain.com/explorer/charts/n-transactions-per-block
https://blockchair.com/bitcoin/blocks?s=transaction_count(desc)#f=transaction_count,id,time

These transaction counts in Bitcoin blocks have nothing to increase or decrease of Bitcoin anonymity. Nowadays, with Python, many scripts to automate things, tracing on-chain data is no longer impossible.

No. For example, let's assume, that you make a transaction like this one: https://mempool.space/tx/000000000fdf0c619cd8e0d512c7e2c0da5a5808e60f12f1e0d01522d2986a51

Then, does it matter, how many transactions are there? In practice, not really, because for example making a transaction with a lot of leading zero bits is something, where you have to write some code, to achieve that. Which means, that a typical user won't do that, and it is crystal clear, that someone who did it, had some coding skills. And that information alone can be used to narrow down the possible set of coin owners.

If you have a lot of small transactions, and some huge CoinJoins, then CoinJoin participants are only hidden inside the CoinJoin traffic. That's why, it is possible to sometimes achieve better results, just by doing a regular one-input-two-outputs transaction, than being a part of some huge CoinJoin.

The same with address types. Some people use only addresses starting with '1'. If you increase Segwit traffic, it won't change their situation (and vice versa).

And the same with coin amounts. If you send 0.01 BTC, then you can hide in a group of people, which also use round amounts. And seeing more transactions, sending 0.01234567 BTC, won't change your situation.

If you want to get there, then you need transaction joining. And then, things which can be seen on-chain, are loosely connected with actually performed transactions, because then, a single on-chain transaction can handle a lot of users. Which means, that you have "Alice -> Bob -> Charlie -> ... -> Zack" seen in wallets, but "Alice -> Zack" is what you can actually see on-chain. The 4 MB witness limit won't let you push hundreds of millions distinct transactions on-chain, where every user would have its own UTXO. Instead, you would have multiple users per UTXO, to fit all of that in a block.

Difficult, but still possible, because the traffic of unconfirmed "to-be-batched" transactions, can still be observed. For example: if you have Lightning Network, then on-chain, you have just some channel opening, and channel closing transaction. But: if you run some LN node, then you can observe, how coins are flying through your node, and you can get some statistics, out of that. And then, on-chain, after getting a lot of confirmations, you can only see a few transactions here and there, to set up, and close channels, but if you had a node, running 24/7, then you can have a clue, what happened in-between. And the same is true with transaction joining: nodes would still need to broadcast to-be-batched transactions in unconfirmed state, and they could be traced in a similar way, as LN transactions are traced today.

Well bitcoin gives us a chance or rather a way to make anonymous transactions but still on a transparent block chain. Firstly there would be no way for some one to track your transactions if they don't have a single clue. The most common is address and if you make use of HD wallets, it actually kind of makes the transaction anonymous by moving your coins around different wallets however it's not very effective if the person monitoring those coins understands how HD wallets work.

Volume doesn't really change much but switching within different currencies is used most times especially with privacy coins like monero. Some can make use of a DEX to swap BTC to Monero then let it sit for a couple of days before swapping back to BTC.

Nothing changed. Metadata is still being collected by blockchain analysis companies and their capabilities are probably still handling the transaction volumes well. Tracking users by observing the blockchain for patterns is a poor method of analysis and from my knowledge isn't the best method of trying to uncover links between different identities. If that is the case, then higher transaction volume equals to having a higher likelihood of different entities having the same patterns.

Anyhow, the problem isn't with this but its really just how people generally have bad privacy habits and it isn't difficult to deanonymize them. This is completely independent of the transaction volume.

As it was before, the volume was good. I mean the high number of transactions. But it is better you are anonymous for a good reason and not for a bad reason. If you are anonymous for a god reason, it will be hard for someone to track you down. Unlike if the government are involved like in scam or hack that huge amount of coins are stolen. It has been since the creation of bitcoin that some people are anonymous.

Nowadays it's clear that Bitcoin is not anonymous and it's getting easier every day to track Bitcoin transactions because there we have blockchain where absolutely every transaction is stored. I don't know what methods are used today to track Bitcoin transactions but those who know more about it, what do you think, will high volume of transactions make it hard for blockchain technologies companies to track Bitcoin transactions? I mean those transactions that use mixers, CoinJoin and btc to monero exchange methods to hide the identity.

So, my question is, what do you think, will the increased number of Bitcoin transactions, I mean hundreds of millions of transactions every day make it hard or almost impossible for blockchain analysis companies to track people? I think that time plays a significant role, i.e. if you send 1 Bitcoin to exchange it in Monero and then send it back in a few hours, it will be easier to track you but with millions of transactions, it should be very difficult to track, right?