𝗣𝗿𝗶𝘃𝗮𝗰𝘆

In the legacy banking system, privacy is protected by a trusted central authority. But in #Bitcoin, there is no trusted central authority, and all transactions are publicly announced on the blockchain. So how can you maintain your privacy while using Bitcoin?

Satoshi’s proposed solution is to keep public keys anonymous. None of your personally identifying information is kept on the blockchain, so if you send some bitcoin to a friend, all that anyone can see is that 𝘴𝘰𝘮𝘦𝘰𝘯𝘦 sent that amount of bitcoin to someone else — or, perhaps they sent it to another wallet of their own 🤔 — but they can’t tell 𝘸𝘩𝘰 sent or received it.

As an additional precaution, one could employ a fresh pair of cryptographic keys (a private key and a public key) for each transaction. This can make it harder for even the very observant to determine who owns what bitcoin. But if multiple inputs that appeared to be owned by different users are combined in a single transaction, that will reveal the fact that they’re all owned by the same individual.

And if your public key is ever tied to your identity, such as when you buy bitcoin through an exchange that requires your personal information, it can be very difficult to regain your privacy.

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