Post
Topic
Board Development & Technical Discussion
Re: How 'Anonymous' is Bitcoin?
by
DannyHamilton
on 14/02/2014, 15:58:36 UTC
It is my understanding that any bitcoin address inside of one wallet can eventually be associated with any other addresses when coins are sent.
I don´t think this is true. How do you think you would be able to link one address of a wallet to another address of the wallet  Huh

It depends on the wallet you are using.  Here's an example with the Bitcoin-Qt wallet:

Imagine you create a brand new wallet.  Then you create 2 addresses in the wallet (address A and address B).  Next you receive 1 BTC at address A, and then receive another 1 BTC at address B.

Now, if you want to send 1.2 BTC from this wallet to somewhere, the wallet will create a transaction that spends both the output that was sent to address A and the address that was sent to address B.  Both of these outputs will appear as inputs in the same transaction.  Then the wallet will create an output sending 1.2 BTC to your intended recipient as well as a second output sending 0.8 BTC (less any transaction fee you might be paying) back to a brand new address that your wallet creates for you and keeps hidden (the new bitcoin address is kept hidden, not the 0.8 bitcoins) from you.  Finally the wallet will provide 2 signature using the private keys from both you address A and your address B.

Since a single transaction has signatures from both address A and address B, it can be inferred that a single entity very likely has control of both addresses.  The addresses are therefore "linked together".