1

I bought a small number of BTC in 2013.

Although it's not true, let's say for simplicity that I never moved them from my wallet.dat where I first received them.

Now, in 2020, I generate a new receive address in Bitcoin Core, loaded with that same wallet.dat.

Then I put this receive address in public.

Can anyone now somehow determine how many Bitcoin I own, based on that receive address?

Or is that receive address now as "opaque" and "pristine" as any receive address which has not received any coins yet?

I've been trying to understand exactly HOW Bitcoin is "not anonymous" for over a decade, but it's very difficult for me to grasp. For all practical purposes, it seems to be anonymous if actually used correctly. That is, never reuse receive addresses.

But I'm probably missing something.

J B
  • 11
  • 1

1 Answers1

0

Can anyone now somehow determine how many Bitcoin I own, based on that receive address?

There is no way to look at an address on the blockchain (or a block explorer) and identify which other addresses were generated from the same wallet that generated that address. Obviously anyone can look at the blockchain and identify the number of Bitcoin held at a single address.

Or is that receive address now as "opaque" and "pristine" as any receive address which has not received any coins yet?

If the receive address hasn't received any Bitcoin it is as opaque and pristine as any other address that hasn't received any Bitcoin.

I've been trying to understand exactly HOW Bitcoin is "not anonymous" for over a decade, but it's very difficult for me to grasp. For all practical purposes, it seems to be anonymous if actually used correctly. That is, never reuse receive addresses.

Privacy (like security) is not boolean. It is a continuum. Bitcoin is pseudonymous rather than anonymous. The number of Bitcoin held at addresses is public but it is not obvious which individual owns a particular address. However, there are ways external to the blockchain where this information can leak in addition to address reuse. For example, if you buy a good from a merchant using the Bitcoin held at that address that merchant now knows you own that address and can track when you spend your funds in future.

Other altcoins like Monero, Zcash, Grin, Beam etc try to provide stronger anonymity guarantees than Bitcoin by not making transactions and effective balances held at addresses public. However they do that at the expense of weaker scalability, more experimental cryptography and/or greater computational burden. Alternatively Lightning (on top of Bitcoin) doesn't make transactions within a channel public but the opening and closing of the channel on the blockchain are still public.

Michael Folkson
  • 15,313
  • 3
  • 17
  • 53