Quote from: TonyT on October 14, 2014, 02:26:40 PM

Thanks to OnkelPaul for the replies.

Here is a good article that's not too technical that explains how not reusing bitcoin addresses would make bitcoin virtually anonymous. But when businesses reuse addresses, they become easy to spot. see:

http://www.bitcoinnotbombs.com/innovations-that-enhance-bitcoin-anonymity/

I guess a simple example of this might be: if anonymous buyers, "A", "B", "C" buy something from a seller "S" who does not change their bitcoin address, and the seller S then uses the money from A,B,C to buy from a supplier SS, who also don't change their bitcoin address, and S and SS constantly deal with each other you might get a diagram like: A, B, C <--> (single link from each buyer to S) to S, which then has multiple links to SS and back to S in the blockchain (and SS never deals with anybody but S). You can conclude that A, B, C are random retail customers of S, S is the middleman, and SS is the sub-contractor or supplier to S. At least that's the way I think of it.

Another example might be if a unique Bitcoin amount that is very distinctive like the sum of 789.12345678987654321 bitcoins is passed around, but each time it is passed between parties then 10 bitcoins are subtracted from the sum, and everybody except S and SS in the above example uses new bitcoin addresses, and say S and SS are known drug dealers, and reuse their bitcoin addresses, and the 'word on the street' is that a large cache of meth is circulating, being passed from party to party, then it follows that everybody who processed the bitcoin sum of 789.12345678987654321 (minus 10 every transaction) is a drug dealer who is trafficking this meth, and taking 10 bitcoins for their trouble (sorry it's kind of stupid but it's the best example I could think of at the moment).

TonyT

Not sure if I understood your original post, but using new addresses does not automatically make you safe and anonymous. If you have 10 btc and get it from coinbase, they probably have records. Even if you send it to a few different addresses, and have those addresses send it off to more addresses, it's still relatively easy to write a script to group them together when you spend any one of them. If you're paranoid about that, better find a coin mixer, mix your coins after acquiring them, and then transfer them to a multitude of HD wallets.