Privacy Tip: Take Advantage of your Addresses!

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3 years ago

One thing for certain is that chainanalysis can reveal your spending. Your Bitcoin (Cash) can always be traced back to its genesis block, and applications are starting to get better in tracing who is who. People have solved it in multiple ways, but one good way is having "deterministic wallets" as explained in @tsakf's post: "Why do we need deterministic wallets?". In a short way, these wallets would create a set of private keys using a set of 12/24/25/48/50 words called a Mnemonic phrase. Modern wallets these days use these phrases to form your wallet keys, and with BIP44 specification allowing users to keep the same phrase over various BIP44-compatible wallet seeds, you can create a set of keys all for yourself.

There's also something good with these deterministic wallets that you don't just have one key. You have near-infinite keys. The wallets that use it, however, stick to only using the first 25 keys it can get, but you can get more.

Now, you might be thinking, wouldn't these extra keys be useless? Not really. By simply scattering all your coins throughout these addresses, you are able to mask your transactions. People have once suggested using one key for a transaction and move towards the next key in the list, and I agree.

This allows you to be able to keep most chainanalysis programs off your tail for a little while.

A negative side effect of this, however, is that there is a high chance of your transaction fee being higher than usual due to the fact that you are trying to move coins from multiple wallets towards one output (and miner fee). This is something you can easily ignore.

Say, you are actually moving rather high amounts of BTC from a wallet to another. Some people actually scatter their coins throughout a multitude of addresses all under the same set of mnemonic phrase. This allows you to mask as you are able to simply pass small amounts of BTC towards another wallet.

How do you check if you are able to switch between addresses depends on your wallet as Electrum and its forks show the first 25 addresses you can get. Bitcoin.com's wallet allows you to easily switch receiving addresses, allowing you to receive from different sources.

Now, if you want further privacy in Bitcoin Cash, there is CashShuffle and CashFusion. Both of them "shuffles" your coins throughout your wallet in a non-custodial manner.

Stay safe, keep your privacy active, and be able to keep your coins to yourself. Not your keys, not your coins. This is Rowan, and have a pleasant day.

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3 years ago

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