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Comment by mariusz79 | Hacker News Reader

Let's say that you pay for Virgin Galactic ticket - that will be a fairly large transaction pointing to your wallet. Someone will be able connect the dots and find out that you also bought Viagra, and a penis enlargement pump. Do you really want that connected to you? Another case - you buy something from one of the stores that accept bitcoins. That store may have the address of your bitcoin wallet. They will be able to use some clever algorithms to see how much money do you have available there, what did you use your bitcoins for, and more stuff like that..

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you don't understand how bitcoin works.

every transaction has a new 'address' (if you choose to.. and this is what happens by default); so when i send a tx to virgin; no one (other than virgin and anyone they tell) will know i sent a tx to virgin.

wallets are made up of lists of addresses; so while the network analysis can be done it is actually no where near the issue you seem to believe it is

@Watty even if you create new bitcoin wallet you need to fill it out with bitcoins. You either have to mine them, or get from someone else. Since we can safely assume that mining is out of the question the only other option is to use exchange.. There will always be a point of entry that the transaction can be traced to..and this place/person/organization will know who the user is. From that point forward they can track you..

You can wash BTC of any identifying information by sending them through a conduit -- someone that is willing to operate an address used to obfuscate the eventual destination of transactions.

What if that someone is the NSA ? :)

Or what if that someone is my n other bitcoin wallets that I use in rotation with varying degrees of trade depth?

You could create a new Bitcoin Wallet and transfer the bitcoins to your "new" wallet.

Wallets generate addresses and prove ownership of them. On the other hand, it's very difficult (impossible) to prove that a given address is controlled by the same person who controls another address.

In other words, you don't have to generate a new wallet, just a new address.

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