Bitcoin is Subject to Traffic Analysis

Bitcoin is not securely anonymous. The publication of all spends creates a data pool that allows a motivated monitor to infer money flow facts about some users, and given the small number of key intermediaries would allow them to infer even more.

This is a straight-forward passive analysis of public data that allows us to de-anonymize considerable portions of the Bitcoin network. We can use tools from network analysis to visualize egocentric networks and to follow the flow of Bitcoins. This can help us identify several centralized services that may have even more details about interesting users. We can also apply techniques such as community finding, block modeling, network flow algorithms, etc. to better understand the network.

An Analysis of Anonymity in the Bitcoin System: Bitcoin is not Anonymous. Spotted via Slashdot, Bitcoin Is Not Anonymous.

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