Florian Cramer on Mon, 2 Dec 2013 21:34:17 +0100 (CET)

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Re: <nettime> Stephen Foley: Bitcoin needs to learn from past e-currency

Another way of looking at Bitcoin is to consider it an unintended privacy
nightmare in the making. Bitcoin is based on the concept that money is
stored in anonymized accounts ("wallets") whose transactions are publicly
viewable; that is, all Bitcoin transactions ever made by anyone,
permanently archived. Supposed that Bitcoin becomes an everyday means of
payment, including for supermarket bills, public transport tickets, rents,
salaries etc., it would not require very much ingenuity or computational
power to analyze all transactions associated to one Bitcoin wallet and,
from the frequencies, quantities and network of its transactions, deduce
the identity of its owner with practical certainty.

For a law enforcement agency or any other third party, it would most likely
suffice to know somebody's recurring bill, preferably via continually
changing amounts of money charged every month (such as a phone or
electricity bill), in order to get full insight into an individual's
wallet, her or his everyday money spending, activities, itineraries, social
relations etc.

This is even much worse than credit or debit cards whose transaction
records at least aren't fully out in the public, and which still can be
circumvented by paying cash.


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