[GeneralQuestions] Anonymizing bitcoins.Can someone please confirm this or blast it out of the water.

I don't put coins through an online tumbler/mixer. Have never used one of those sites, so I don't have any reason to distrust them. But it seems like adding an unnecessary point of possible failure to the process.

I use Mycelium Android HD wallet. Let's say I buy 1 bitcoin from circle.com and move it to my current Mycelium public address. As soon as that transaction happens, Mycelium archives that address to a pool of legacy addresses and creates a new public address at the top-level. The new address has no history on the blockchain.

So now I send that coin to merchant XYZ with the sending addr being the new one. And circle.com, nor anybody else, has any way to connect the dots and follow the trail.

Am I correct that any time I add money to my wallet, and it creates a new address to send that money from, that bitcoin has been anonymized?


Comments


[2 Points] tearsfrommydick:

So from what I understand you're moving Circle --> Your Mycelium wallet --> Market? If it ever came down to it you could say you just sent it to a friend and thus you weren't responsible for that transaction. Kind of a flimsy argument though. And yes if circle wanted to they could connect the dots with your transaction, every transaction is recorded on the ledger.

If you don't want to tumble, you could be a little bit more secure by sending pieces of your circle bitcoins to separate electrum addresses. Then send those coins to a Mycelium wallet, then to a vendor. Or keep bouncing them around with fresh installs of both depending on how much you want to distance yourself from your coins.

Btw I'm no Bitcoin expert. If someone out there knows more and can correct me feel free.

To be honest though, unless you are a huge drug pusher, it's much more likely real life security will fuck you over, rather than digital security. That's not to say don't half ass your digital security, but it's not very likely LE will perform forensics on the blockchain to prove you ordered an O of weed


[1 Points] impost_r:

To answer your question: No that's not how it works, Mycelium generates a new address after every transaction but that's just for receiving coins. When you're sending coins that address is not involved since it doesn't have a balance in the first place, your previous receiving addresses that do have a balance will be funding the new transaction. Using simple methods you can reasonably assume that those addresses belong to the same person.

Circle will see you sending coins to that wallet and if they are anal about it they can suspend your account if you keep using Circle for funding that wallet that keeps on sending to 'darknet wallets'.

I'm not sure whether they actually do that but I know of one example where Coinbase suspended an account that sent btc to an intermediate wallet and then to a wallet that belonged to a guy selling marijuana seeds. It wasn't a darknetmarket wallet so I wonder where they got that info from, perhaps authorities give them btc addresses that are associated with crime and force them to suspend any accounts that are linked to it?


[1 Points] ShulginsCat:

And circle.com, nor anybody else, has any way to connect the dots and follow the trail.

Not really. Anyone who knows your circle.com address can connect those dots. If you want to see this in action, dump your circle address or the transaction ID into blockchain.info and see where it goes.

The reason this works is because once you send coins to address A, they remain in address A until someone moves them. There is no way for Mycelium or any other client to "invisibly" move coins from addr A to B without it being on the public ledge, i.e. the blockchain.


[1 Points] trasla:

"From address" is a dangerous misconception for various reasons. The new address you see in mycelium is a new receiving address, it is there to make sure new payments you get cannot easily be linked to previous ones, and private keys not being reused. Check this: https://en.bitcoin.it/wiki/From_address


[1 Points] Rassah:

When circle sends you coins to your address, they know that address is yours. When you spend coins at a merchant or send them elsewhere, all the coins from the old address are moved out, and some go to the merchant, while some go to your new address. There is no way for anyone to know which coins went to the merchant and which went back to you, BUT if it's just on the first spend, and Circle knows about merchant addresses, they can know that the money they sent to your known address was then spent at a known merchant address. You would have to create a few more spends, and spend at a few more reputable places, before the link between your addresses is completely obfuscated.