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Comment by redog | Hacker News Reader

To me this feels like concern without regard for the full differences. With bank accounts you usually have the restriction of "as many accounts as you can afford" where with bitcoin addresses you can have countless. So someone could just as easily watch you drive up to the bank and know you bank there. Keep your private addresses private, duh.

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Even with multiple wallets, the point is the same that your Bitcoin address is tied to your complete transaction history and account balance. Your Bitcoin address is just an alias for your real identity. If (or once) your Bitcoin alias is tied to you, you have zero privacy. Through public meta-analysis you can get a pretty clear picture of the spending habits and maybe even location of a Bitcoin address. Or, a purchase of a physical product where you give your home address and your Bitcoin address and your alias is linked to your actual home (albeit in the records of a 2nd party). But still, it's not hard to imagine how non-private Bitcoin is.

And following someone to BofA doesn't exactly give you much if any information about them. Even if I gave you my checking account number (which is on all my checks), you still can't go and access my financial records without doing something illegal.

Yeah, but lets say you make a website and want to accept donations using bitcoins. What you generally do is put "donations welcome at <bitcoin address>!" (I see this all over the place). Are you saying that webmasters should write a script that generates these public/private keys on every page hit, and then somehow stores all of those millions of private keys... somewhere? On your server? Or do you have to build an entire infrastructure of key exchanges to some safe place just so you can accept bitcoin donations privately?

> webmasters should write a script that generates these public/private keys on every page hit

Not on every page hit, but on every donation or every few days depending on how many transactions you've received. It doesn't have to be completely new set of keys - you can use deterministic wallet to generate as many as you want from a single master secret.

Why would it have to be "donations welcome at <bitcoin address>!"? There's plenty of ways to ask for donations and it doesn't always require to have a single address shown. You can have a "Donate" button that when clicked, ask for a generated wallet (all from the same private key but that would be a different wallet still) and show it with a QR code in bonus.

Look, I'm not making this up. Lots of people and projects do exactly this. Tails, the super-secure privacy-focused version of Linux asks for donations in exactly this way [1] (and if you go to blockchain.info you can see a full wonderful list of all the bitcoin addresses who have donated to them [2]). It's a totally reasonable way to set up bitcoin donations (hell, it's even recommended by the bitcoin wiki! [3]) and it's a significant weakness of bitcoin that these transactions are not private.

It is absurd defense of bitcoin to say "well, it COULD just be as private as these other things, if you only jump through ten more technical hoops and not use bitcoin as intended". Clearly, these other cryptocurrencies offer something that bitcoin doesn't.

[1]: https://tails.boum.org/donate/?r=contribute

[2]: https://blockchain.info/address/1BvBMSEYstWetqTFn5Au4m4GFg7x...

[3]: https://en.bitcoin.it/wiki/Receiving_donations_with_bitcoin

>>Are you saying that webmasters should write a script that generates these public/private keys on every page hit, and then somehow stores all of those millions of private keys... somewhere? On your server?

There's actually a solution called stealth addresses that let you publicize a single static donation address and yet receive every donation at its own unique address:

https://bitcoin.stackexchange.com/questions/20701/what-is-a-...

This is an off-chain construct so can be utilized with any blockchain.

If I make a new bitcoin wallet, and transfer money from my 'main' wallet into that one, would that be traceable by anyone who deal with my new wallet? Would I need to use/trust some kind of 'washing' service to hide my transaction among several others?

Any "wallet" is not single address, but set of addresses. Each address is just cryptographic private key and you might have as many as you want. Though as soon as you sent any transaction public key of your wallet become known.

This is why by default each time you make transaction for any amount bitcoin client send specified amount of coins to target address and all that remain to some new address that you own. While you not announce that you have access to that new address it's fairly easy to track your money.

> Would I need to use/trust some kind of 'washing' service to hide my transaction among several others?

So answer is yes.

So what good is keeping the coins in separate addresses then? An earlier poster implied that you should keep separate addrs to avoid people knowing how much you have in full - but if you still have to wash the coins to separate accounts, what good is that? You're still washing all your coins - how many addrs you have seems like a side detail.

The only thing I can think of that separate addrs gives you, is that you can have a small amount of the coin in an address that you use for daily transactions. Meaning each transaction doesn't need to be washed, because you don't care about that address.

Am I missing something?

> So what good is keeping the coins in separate addresses then?

Publishing of your public key slightly decrease security of your coins. While ECDSA is strong it's still safer when only hash of your public key (bitcoin address) is known. After all you can always end up with weak key due to software or even hardware bugs.

> Am I missing something?

You're completely right, but you underestimate how important that little detail is. If you only receive money to different addresses each time then until you actually start spending it's will be impossible to prove that you actually control any of these addresses.

It's like with session keys for secure communication. Generating different keys for each session doesn't solve all your problems, but there would be no benefit to reusing a nonce key and doing so amplifies certain risks.

>would that be traceable by anyone who deal with my new wallet?

yes

>Would I need to use/trust some kind of 'washing' service to hide my transaction among several others?

congrats, you just reinvented mixers and coinjoins

I know that, you know that, but is that something the average person is aware of or do they think it works like Venmo?

If I go to a bar should I have to cycle currency between addresses to pay for a drink and avoid the bar man knowing my complete financial history? That sounds like a terrible UX.

I shouldn’t have to think about it. This is why I like the concept of privacy coins.

The wallet UI should do that for you automatically. Wallets which reuse addresses have been a constant source of privacy breaches and even lost coins (is it iota where you can lose coins if you use the same address as few a two different times?)

Most wallets these days don't reuse addresses, but without mixing, confidential transactions, or another approach, it's trivial to cluster a wallet via its chance outputs, etc.

Iota is/was incredibly broken, and shouldn't be used as an example IMO.

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