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Anonymous Transactions?

Bitcoin transactions are not so anonymous. When two users enter into a transaction, they use the network to transfer Bitcoins from the sender to the receiver. When the sender wants to send BTC they have to be accumulated from one or more previous transactions. These are aggregated into an transaction with one or more outputs. The outputs are the number of BTC going to the receiver and the change back tot he sender. The transaction is then relayed to the peer to peer network and included in a block.Since the transactions are public by the nature of the P2P network, every one can see that BTC transferred from one address to another. At this point the transaction is anonymous. However, with some detective work it is possible to tie transactions to a user. This is possible because BTC are included from previous transactions. So there is a chain of BTC.There are a number of well known public addresses, which known because the user publicly announces them. For instance the WikiLeaks donation address is well known. It has to be in order to sympathetic users to send BTC. As a result a network diagram of transactions can be constructed showing all the Addresses that sent the WikiLeaks donation address BTC. This diagram can then be used to see if a path to another well known source can be found, such as a mining pool. If so it can be tied to a user, if they have provided personal identifying information.I was looking to write a tool that drew a picture of the network diagram of a series of transactions. Through some initial investigation found that one already existed. Here is an article that shows it in action:

One comment on “Anonymous Transactions?

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This entry was posted on November 25, 2012 by in Anonymity and tagged .
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