| ▲ | dpedu 3 days ago |
| The anonymity aspect of it always confused me. If anything, bitcoin and almost all other cryptos are the ultimate surveillance state currency. Every single bitcoin, no matter how many fractions it is broken into, is traceable through every single transaction it has ever participated in, all the way back to when the coin was first mined. |
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| ▲ | dale_glass 2 days ago | parent | next [-] |
| Early on bitcoin was thought to be pseudoanonymous. Like sure, it's all public, but what's public is "bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh", not "John Smith, age 43, living in Florida". Then two things happened: people figured out that it's actually very easy to connect the dots, particularly if somebody ever does something like: "donate here: (hash)". And, Bitcoin is hard to get into. As soon as difficulty went up, making yourself some went out of the window. Now you have to buy it. And its characteristics mean that anyone selling any online wants to be really, really sure of your identity. Thus near everyone ends up creating accounts at Coinbase or wherever with very accurate identity verification, and now we've got real names connected to those random looking numbers. |
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| ▲ | chickensong 2 days ago | parent | prev | next [-] |
| That visibility could be considered a feature for some use cases. We could use more transparency in many areas, particularly government. |
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| ▲ | nout 3 days ago | parent | prev | next [-] |
| When you start transacting on Bitcoin Lightning network (which is essentially sending pre-signed bitcoin transactions in a smart way, without submitting them on the main chain), then you no longer see each transaction. Lightning introduces decent privacy, not perfect, but decent. |
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| ▲ | tsimionescu 2 days ago | parent [-] | | It's also not guaranteeing double spend protection (especially not passively), and is not actually using Bitcoin, except occasionally and optionally. | | |
| ▲ | nout 2 days ago | parent [-] | | It does guarantee double spend protection, that's exactly what the lightning nodes do. If someone tries to double spend, they lose their bitcoin. I have a different definition for "using bitcoin" than you do. Similarly I believe that HTTP Live Streaming is using Internet... | | |
| ▲ | tsimionescu 2 days ago | parent [-] | | That's only true if they observe the channel being fraudulently closed in the right time window. You have to actively monitor the BTC chain to see if your Lightning network partner might steal from you. If you don't (e.g. There is some network or power issue and they take this opportunity to steal), tough luck. Basically Lightning is like a tab that you open in a bar. You perform various transactions on the tab, and only settle later. No one would say that you're using Visa when you tell the bartender to put some drink on your tab, even though at the end of the day or week or whatever, the transaction will go through Visa. | | |
| ▲ | nout a day ago | parent [-] | | Bar tab is so very bad analogy here that breaks for multiple reasons: - At the bar is almost always a single direction: customer pays the bar. Lightning is both directions - sending money between friends and sometimes to shops. - In this (bad) analogy bitcoin would not be Visa, but bitcoin would be "dollars". Both the bartender and customer would say that they are using dollars for the tab. - The tab analogy doesn't really match the fact that you establish a "channel" (e.g. both you and the bartender would put some bitcoin into this channel and then you can pay your grandmother in another country with bitcoin in this channel... see the analogy doesn't work here), you can resize ("splice") the channel if you want, you can swap in and swap out... In most solutions your wallet monitors the chain and it automatically resolves any of the dispute (e.g. Phoenix wallet, or Zeus). The time scale is also different, so even if power goes out for multiple days and you are running your own very private wallet without any associated service (LSP), then you still have on the order of weeks for your wallet to automatically resolve any issue. |
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| ▲ | roncesvalles 2 days ago | parent | prev | next [-] |
| It isn't anonymous. Anybody who says bitcoin is anonymous either doesn't understand bitcoin or doesn't understand anonymity. It's pseudonymous. |
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| ▲ | charcircuit 3 days ago | parent | prev | next [-] |
| Technically there is no such thing as a bitcoin. Just unspent transaction outputs. Those get spent as an input of a transaction and then are gone forever. There is no concept of the output of a transaction being the same "bitcoin" as what comes from the input of the transaction. This means if you had 2 inputs and 2 outputs of the same amount there is no way to trace which input became which output. At best you can find which outputs potentially came from an input. |
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| ▲ | lazide 2 days ago | parent [-] | | That is called tracing. It’s also not hard - every node does it to verify blocks. | | |
| ▲ | charcircuit 2 days ago | parent [-] | | When blocks are verified it just needs to validate that sum of the outputs isn't more than the sum of the inputs. It doesn't care about tracking what went where. | | |
| ▲ | lazide 2 days ago | parent [-] | | Except I can literally pull up a full node and see a wallets current balance - which is because it traces all the transactions through the blockchain, verifying all of them. Literally the only way anyone can see their wallet balance is by doing this. | | |
| ▲ | charcircuit 2 days ago | parent [-] | | You can find your balance by looking at the UTXO set and seeing if your adress can spend it. There is no need to trace where those UTXO came from. | | |
| ▲ | lazide 2 days ago | parent [-] | | But every full node does, because it is required to validate the chain. Near as I can tell, you just don’t know how Bitcoin actually works? | | |
| ▲ | charcircuit 2 days ago | parent [-] | | I will say it again. When validating the chain all it cares about is that the sum of the output UTXO for a transaction are <= the sum of the input UTXO. All the input UTXO are no longer valid once spent and can be forgotten. |
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| ▲ | Cyao 3 days ago | parent | prev | next [-] |
| But you (theoretically) cannot know who mined the coin, or who is actually the holder of the coin, thus the anonymity. Though currently this is getting restricted as governments require more ID verification from businesses dealing with crypto, which links up your coin to a real person. |
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| ▲ | tsimionescu 2 days ago | parent [-] | | The correct term here is pseudonimity - you know the immutable, stable wallet id of who mined the coin, which is a pseudonym for a real person. Anonymous systems are ones in which it's impossible to associate an identity with the work item. For example, if I send cash through the post office, and I don't sign the envelope, that is a form of anonymous payment - it's impossible to tell who sent the payment (assuming there is no footage of the post box where I deposited the envelope, and I left no DNA on it, etc). If you receive a second payment, it's impossible to tell whether it came from the same person or someone else. | | |
| ▲ | rjdj377dhabsn 2 days ago | parent [-] | | How is the serial number on cash any more anonymous than bitcoin addresses? | | |
| ▲ | tsimionescu 2 days ago | parent [-] | | Because it's attached to the bill itself, not the owner or the wallet. If I give you a dollar bill with the serial number 100100, it's impossible for you to prove that bill came from me (unless you have forensic evidence of me giving it to you, of course - but that's equivalent to having photo evidence of me typing in my private key to a BTC wallet) . If you find a dollar bill on the street, it's now yours, you can't know anything about its previous owner. In contrast, a BTC address is a unique identifier for someone who owns the BTC. The blockchain stores all addresses that it ever interacted with, so even if you create thousands of wallets, they can all be-anonymized quite easily if one is, as you can track how money was sent between them. | | |
| ▲ | scotty79 2 days ago | parent [-] | | You don't have to transfer bitcoin. You can give someone private keys to the wallet and they can do anything they want with it. It would be exact equivalent of giving someone the bill | | |
| ▲ | tsimionescu 2 days ago | parent [-] | | You do have to transact bitcoin to get bitcoin into the wallet. Plus, you can't prove to someone you haven't kept a copy of the private key, so you can't really transfer ownership of a private key, not trustlessly. | | |
| ▲ | scotty79 a day ago | parent [-] | | Let's assume we know a certain btc address belongs to Alice and the other one to Bob. If Alice transfers coins to Bob's address we can see that Alice transferred ownership of the coins to Bob. But if Alice just gives private key to her address to Bob, then Bob generates new address (which we won't know is his) and transfers the coins there when we won't know for sure that the ownership of the coins changed. If we didn't see Alice passing the private key to Bob we have absolutely no reason to think that Bob owns any coins. We see that his known public address is still empty. | | |
| ▲ | tsimionescu a day ago | parent [-] | | At some point, Bob will want to spend the coins on something that he needs. At that point, you'll be able to trace the whole chain of transactions and know that Bob got the coins from Alice. Sure, you won't know that Alice transferred the private keys to Bob, but you'll still see a chain of transactions that starts with money in a wallet associated with Alice and ends in a wallet associated with Bob. The private key transfer doesn't achieve anything at all: Bob could just as easily have opened a new wallet and asked Alice to transfer money there instead of his known wallet, nothing in the analysis would have changed. | | |
| ▲ | scotty79 a day ago | parent [-] | | True, but only if you monitor Bobs purchases. Funds are anonymous until you see them leave network. And that might be years or decades in the future. And one sale/purchae on uncontrolled exchange breaks the chain. | | |
| ▲ | tsimionescu a day ago | parent [-] | | The chain is unbroken. If at any point you identify the owner of a wallet, you then find out the full transaction history of that person. That is the problem with putting all of the data in an append-only ledger that is pseudonymous. | | |
| ▲ | scotty79 8 hours ago | parent [-] | | Yeah, try to tracm down chain that went through russian crypto exchange wallet. Then Thailand then Venezuela. |
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| ▲ | FieryMechanic 2 days ago | parent | prev [-] |
| You are confusing anonymity and privacy. Bitcoin can be anonymous, but not private. |
