Everywhere cryptocurrencies are being debated one of the biggest topics seems to be anonymity. On one hand the debate seems to be all about the seedy level of anonymity, silk road, illegal markets, etc. The other side of the debate seems to be the deliberate avoidance of the privacy issue from within the cryptocurrency community.
No matter. Plainly displayed on the Bitcoin.org privacy page is tons of information plainly stating that Bitcoin transactions are 100% transparent and have no level of anonymity.
Bitcoin works with an unprecedented level of transparency that most people are not used to dealing with. All Bitcoin transactions are public, traceable, and permanently stored in the Bitcoin network. Bitcoin addresses are the only information used to define where bitcoins are allocated and where they are sent. These addresses are created privately by each user’s wallets. However, once addresses are used, they become tainted by the history of all transactions they are involved with. Anyone can see the balance and all transactions of any address. Since users usually have to reveal their identity in order to receive services or goods, Bitcoin addresses cannot remain fully anonymous. For these reasons, Bitcoin addresses should only be used once and users must be careful not to disclose their addresses.
They go on further to describe an open environment with an acceptable level of privacy protection. Read on another page and “some effort is required to protect your privacy. That same page also seems to say that absolutely 100% of any type of anonymity is the user’s responsibility. Read it anyway, but none of it seems to really add up to anything remotely resembling either private or anonymous.
Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices in order to protect your privacy.
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p> Once again, privacy and anonymity seem to be being discussed as if they were two completely different subjects when, in fact, they go hand in hand if not one and the same. This poses the following question, “If Bitcoin is neither private nor anonymous and also requires a centralized exchange server then why is it touted as peer-to-peer?” That may seem like a loaded question but it is not. True peer-to-peer technology, or P2P, is defined as a decentralized architecture where individual computers, or nodes, can act as senders and receivers of information to any other node without the need for an authoritative centralized server as defined in the traditional client-server model. Within the p2p model there is no need for a centralized server in any fashion. Individual computers can communicate directly with one another and therefore increase or decrease encryption, security, processor power sharing, etc. as deemed necessary by the network. In other words, using true p2p technology, anonymity and privacy could be established if deemed necessary by the network. Once again the question arises as to how Bitcoin can be labeled “p2p” when it absolutely requires a centralized server and utilizes a system that records every single transaction ever made?
So, where did the whole “Bitcoin Is Peer-To-Peer” ideology come from and why is it not referred to as “client-server” or even simply “based on p2p” technology? The answer is not that simple. Just peruse through any of the forums in any one of the Bitcoin communities like bitcointalk.org and see how the subject is avoided and those asking the questions are ostracized.
There seems to be a truly peer-to-peer cryptofinance infrastructure on the rise. Altchain.org seems to be the most promising up and coming community that is directly addressing the anonymity and privacy concern by eliminating the need for a centralized server or exchange of any sort. They claim to have developed a new technology based on the Bitcoin Protocol called “Confidence Chains.” Instead of proof of work, the block is a set of transactions (including the hash of the previous block) that is then RSA signed by a participating identity in the network. The chain is a list of RSA signed transaction blocks. Each node in the network attempts to work off of the most confident chain in the network. The confidence weight of each block is obtained by adding the weight of each identity that approved it. The total confidence weight of the chain is determined by the summation of all the confidence weights from each signed block in the chain. Over time the confidence of each chain will build and it will become impossible for any single node to build a chain of higher confidence with the given cryptographic resources and information available to it. The confidence of the chain becomes an irreversible function of the cryptographic historical interaction of one or more nodes. Let’s see what the future holds!!!
Cryptofinance 