Bitcoin Transaction are not Private as What you Think

First of all I would like to say that some of you might already know about it.If you already knew about this please share your thoughts and idea about this I just like help new members and new to crypto world regarding with this topic.Thanks have a good time reading about this.

The main reason I think why people are using bitcoin in the most of their transaction was to provide safety and efficiency with their transactions,Many company and online stores are now accepting bitcoin as payment with their product.But people think that using bitcoins as their preferred payment option online gives them extra layer of security,privacy and anonymity.But it's actually not to understand why bitcoin transaction was not really anonymous as what we think let's first understand how bitcoin transaction work.

How Bitcoin transaction work?
Most importantly, the Bitcoin protocol effectively consist of a series of transactions. These transactions are basically a package of different kinds of data, among which are transaction inputs and then the transaction outputs

transaction inputs - bitcoin address where bitcoin transaction from and can be use using a private key associated with that address. In short the sender.
transaction outputs - bitcoin address where bitcoin transaction send to in other words the receiver.

What makes bitcoin anonymous?

the reason why bitcoin is anonymous unlike banks and many payment providers, Bitcoin are not tied to the identity of users on a protocol level. Anyone can create a new and completely random Bitcoin address at any time, without the need of the users personal information such as name and addresses.

Bitcoin transaction data is transmitted and forwarded by nodes to a random set of nodes on the peer-to-peer network.

WHY Bitcoin Transaction is not Anonymous??

Security tend to call bitcoin transaction as pseudonymous privacy.

Steven Goldfeder of Princeton University and other people says that information can be leak during normal purchase online and make a link individuals with the bitcoin transactions they make even the users use additional privacy protections.

Web trackers and cookies a small pieces of code embedded into the website back-end server that send the information to the 3rd parties about the action and way of people using the website.Most common web trackers send information to Google,Facebook and others to track the site usage,the purchase value,browsing habits and other means.But unfortunately some of these trackers can send personally identifiable and traceable information including your name,addresses and personal emails. by this way information and personal data about the particular transactions was leak onto the web. Where law enforcement agencies and malicious users can easily and readily to collect and analyze it.

They also study how web trackers expose and leak information from each of these sites during purchases. "We find that at least 53/130 of merchants leak payment information to a total of least 40 third parties,most frequently from shipping cart pages," say Goldfeder and co.

The information leakage is intentional for the use of advertising and analytics,but researchers says " we find that merchant have far more serious information leaks that directly reveal the exact transaction on the blockchain to dozens of trackers" they say.

that is the bad news for the users that are hoping to keep their transaction anonymous. But even when the exact transact is hidden it's still possible to make a leak when the leak includes the amount and time of the purchases.

All this will come as depressing news to people hoping to preserve their privacy online.
But it will also be music to the ears of law enforcement agencies hoping to track nefarious activities. Like virtually all deanonymization attacks on cryptocurrencies, our techniques could be used to build forensic tools for law enforcement use, admit Goldfeder and co.

And like all deanonymization techniques, that will have advantages and disadvantages.

References and sources of information:
https://bitcoinmagazine.com/articles/is-bitcoin-anonymous-a-complete-beginner-s-guide-1447875283/
https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/

edsnow2017

Posts

Merits