Florian Cramer on Thu, 5 Dec 2013 14:28:04 +0100 (CET)

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

On Wed, Dec 4, 2013 at 2:02 AM, Douglas La Rocca <douglarocca@gmail.com> wrote:

There's a distinction between wallets and addresses. Addresses are
traceable and can be analyzed in that manner. Wallets are collections of
addresses which need not ever be publicly associated.

Far from being *worse *than tracing credit/debit cards, because a user can
constantly "shift" identities (frequently used addresses, say), Bitcoin
actually makes it possible to avoid the privacy problem.

Point taken, but the structural problem remains: That the currency is _intrinsically_ coupled to accounts - accounts out in the open, on top of that - and means of payment. Anonymous payment will always require the complex deflection/circumvention devices you describe. If it's not default behavior (like in cash), anonymity/privacy boils down to an afterthought and a usability hassle. If Bitcoin becomes a popular means of payment, its users would be as unlikely to constantly make and shift new addresses as they are unlikely to shift E-Mail addresses and login identities on Web services right now. 

(I also have my doubts that shifting identities really solves the problem of reverse identification through computational analytics as it only adds one layer of obfuscation. Live in a small remote village, for example, and these means won't help because the one person buying The New York Times in the local market will always be identifiable no matter what Bitcoin address s/he'll use for payment. You could argue that there's no anonymity of transactions in a village anyway, but it becomes quite a different story if all those transactions become world-readable on the Internet.)

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