Bitcoin Whitepaper on Privacy - Reading Assignment

Look at the Bitcoin Whitepaper (https://bitcoin.org/bitcoin.pdf) and answer these questions from section 10. Privacy. Post your answers below.

  1. What is the basic method of maintaining anonymity?
  2. What additional method does Satoshi suggest?
  3. What weakness does this additional method have?
  1. The basic method is that you can’t link together transaction amount and public key to the identity of the person.
  2. Changing public key for every transaction
  3. With multi input transactions it could be shown that the transactions belong to the same owner and they could be linked to other transactions of the same owner
1 Like
  1. It can be maintained by breaking the flow of information in
    another place: by keeping public keys anonymous.
  2. Changing public key for every transaction
  3. Owner and transaction can be linked together.
3 Likes
  • What is the basic method of maintaining anonymity?
    The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone

  • What additional method does Satoshi suggest?
    A new key pair should be used for each transaction to keep them from being linked to a common owner.

  • What weakness does this additional method have?
    The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.

2 Likes
  1. the basic method of of maintaining anonymity is by keeping public keys anonymous.
  2. Satoshi suggest: a new key pair should be used for each transaction to keep them from being linked to a common owner.
  3. additional method has a weakness that if the owner of a key is revealed, linking could reveal other transactions that belonged tothe same owner.
1 Like

1. What is the basic method of maintaining anonymity?
By separating the privatkey that only the owner knows and hasing it into a public key (and from that an address). This way you can not go back and figure out the privat key (aka the owner).

2. What additional method does Satoshi suggest?
That for every transaction there should be a new key/address. This way you can not analyse all the transactions connected to a single publickey/address and combining the information and possibly figuring out the who the owner is.

3. What weakness does this additional method have?
If there is a transaction with a a lot of inputs you could possibly connect them to the owner if u can find a pattern between the inputs that show they are linked and owned by the same owner.
(zeroing down from all the inputs into a single owner)
It also does not cover the fact that you can still figure out the IP address from the broadcast, so if u can figure out the owner u can figure out all the other transactions aswell even tho they have different keys.

1 Like
  1. The basic method of maintaining anonymity is by keeping public keys anonymous

  2. change the public key for every transaction

  3. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner

1 Like
  • What is the basic method of maintaining anonymity?
    Keep public keys anonymous.
  • What additional method does Satoshi suggest?
    Use a new key pair for each transaction.
  • What weakness does this additional method have?
    With multi-input transactions you are revealing that the inputs are owned by the same owner; so if the owner of the key is revealed, linking could reveal previous transactions that belonged to the same owner.
1 Like
  • What is the basic method of maintaining anonymity?
    breaking the flow of information, by keeping public keys anonymous. The public can see that some address is sending an amount to someother address, but without information about who owns the addresses.

  • What additional method does Satoshi suggest?
    As an additional firewall, a new key pair should be used for each transaction to keep them
    from being linked to a common owner.

  • What weakness does this additional method have?
    The risk is that IF the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.

1 Like
  1. On the WP it is said that it is possible to maintain privacy - anonymity actually - by keeping public keys anonymous, so that everyone could see what are the public keys involved in the transactions but no one could be able to link them to the identity of their owners.
  2. It is suggested to use new key pairs for other transactions, in order to avoid connections with previous ones.
  3. If someone would find out about all the public keys related to a specific owner, it would be possible to identify all the transactions in which that owner took part. This could happen when performing a transaction which requires an input greater than the singular inputs owned on the wallet, forcing the owner to perform a multi-transaction that would link the different public keys and make them “attributable” to a single owner.
2 Likes
  1. What is the basic method of maintaining anonymity?
    The basic method is keeping public keys anonymous.

  2. What additional method does Satoshi suggest?
    As an addition new key pair should be used for each transaction to keep them
    from being linked to a common owner.

  3. What weakness does this additional method have?
    If the owner of a key is revealed, linking could reveal other transactions that belonged to
    the same owner.

1 Like
  1. What is the basic method of maintaining anonymity?
    Keeping the public key anonymous.

  2. What additional method does Satoshi suggest?
    Generating a new key pair for each transaction.

  3. What weakness does this additional method have?
    Anonymity of the public key may be compromised in multi-input transactions (which reveal that the inputs are owned by the same owner).

1 Like
  1. Through the use of public keys that allows parties to remain anonymous.
  2. By using a new key pair with every transaction.
  3. Transactions with multiple inputs can reveal that inputs are owned by the same owner, and if the owner is later revealed, more transactions can be linked to the same owner.
1 Like
  1. What is the basic method of maintaining anonymity?
    Be able to not link public keys and the related transaction information to identities.

  2. What additional method does Satoshi suggest?
    a new key pair should be used for each transaction to keep them
    from being linked to a common owner

  3. What weakness does this additional method have?
    The risk
    is that if the owner of a key is revealed, linking could reveal other transactions that belonged to
    the same owner.

1 Like

1. What is the basic method of maintaining anonymity?

The basic way is to avoid linking the public keys to identities of people involved.

2. What additional method does Satoshi suggest?

As an additional “firewall”, he suggested also to use another key pair for each transaction, to avoid them being linked to a common owner.

3. What weakness does this additional method have?

Multi-input transactions, e.g. when you want to withdraw from a known exchange like coinbase, bitstamp etc., the exchange usually includes your withdrawal in a batch, with many other withdrawals from different customers to save up on fees. This make it obvious that all the inputs are from the same owner (the exchange in this case).

1 Like

1. What is the basic method of maintaining anonymity?
The basic method is keeping public keys anonymous.
2. What additional method does Satoshi suggest?
“a new key pair should be used for each transaction”
3. What weakness does this additional method have?
If the owner of a key is revealed, linking could reveal other transactions that belong to the
owner.

1 Like
  1. UTXO is not attached to any individual by default.

  2. Constant changing of public address is recommended.

  3. In a TX where many inputs and outputs are used the inputs and outputs become linked. Then linking IP addresses. Info about exchanges, patterns of behavior, and any other info that also links to given info slowly paints a detailed picture of the user. Many of the types of connections made in models can’t be made buy a person but are discovered by software.

1 Like
  1. What is the basic method of maintaining anonymity?
    -> keeping public keys anonymous
  2. What additional method does Satoshi suggest?
    -> a new key pair should be used for each transaction to keep them
    from being linked to a common owner
  3. What weakness does this additional method have?
    -> The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner
1 Like
  1. By limiting access to information to the parties involved and the trusted third party.
  2. By keeping public keys anonymous.
  3. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.
1 Like
  1. by keeping public key anonoymous
    2.using a different key for each transaction
    multi input transactions, one good link several transactions together that have the same output if they have several inputs
1 Like