How to hide transaction history in the blockchain? It is said that many cryptocurrencies today, including Bitcoin and Ethereum, provide anonymous. But what does this mean, and more importantly, is this true? Privacy is not binary. It belongs to a scope: from complete public to complete private. It is difficult to talk about hiding all data in a public and transparent blockchain, but we can only hide part of the transaction. In this article, some knowing technologies that use well -known cryptocurrencies to achieve reasonable anonymous levels will be introduced.

Learn about the traceability of Bitcoin

Bitcoin's unprecedented transparency operation, which is not used to handling most people. All bitcoin transactions are public, traceable, and are permanently stored in the Bitcoin network. Bitcoin address is the only information for defining Bitcoin allocation positions and sending positions. These addresses are created privately by each user's wallet. However, once the address is used, they will be contaminated by the history of all the transactions they are involved. Anyone can see the balance of any address and all transactions. Because users usually have to disclose their identity to obtain services or products, the bitcoin address cannot be completely anonymous. Because the blockchain is permanent, it is important to pay attention to what cannot be tracked in the future.

The key points of blockchain technology

Blockchain creates a more open financial system, but they usually cannot effectively help users maintain privacy.

Blockchain networks such as Monero, ZCASH, and Secret Network focus on protecting the privacy of user.

By providing users with a method of confusing trading history, the hybrid services of Bitcoin and Ethereum also attracted attention.

Anonymous and privacy of blockchain

In order to deeply understand the problems we will face in this article, we need to define these two -actually very different -concepts.

Anonymous "describes the unknown of the agent's name". Hidden behavior itself has no meaning. on the other hand,

Privacy is defined as "individuals or groups areolate yourself or understand your own information, so as to choose your ability to choose from"

To put it plainly, we can say it accurately that anonymous is hidden "who", and privacy is hidden "what". In the context of the blockchain, anonymous means that all parties can exchange data without disclosing any chain identity information or other transactions they do. A simple example may be Bitcoin, which is part of the anonymous (each address is just a random public key hash), but it is not private (we know all transactions from/to this address).

So, how does Bitcoin "partial anonymous"?

People like to think that Bitcoin makes their transactions anonymous. In fact, when conducting BTC transactions, all details, including the source address, are permanently stored in public classification, which means that anyone can see the balance and transaction history of any bitcoin address. As long as the author's address cannot be associated with its actual identity, such data will remain anonymous. However, this may be difficult to achieve. For example, when you register an exchange for the KYC mechanism (most of them are enforced according to law), this connection will occur. Or when you post your address on your blog to get donations.

Indeed, you can generate a new address and use it for "anonymous" payment. Bitcoin's primitive white paper is recommended to use a new address for each transaction. This helps to avoid transaction links to a common owner, but it will also cause another set of problems. First, you must recharge the address you want to pay. how? If you send funds from another address, track this address and finally reveal your identity is very simple. All of this is about reading the history of the blockchain (transaction diagram analysis, stain analysis, tracking payment, network crawler and many other mechanisms) and viewing network traffic. Almost anyone who has enough time and dedication can track the information and link them (see this video to better understand the process behind it). In addition, because the Bitcoin network is an ordinary P2P, it is exposed to various network -level attacks. Everyone between users and Bitcoin networks (such as ISP) can easily reveal his IP address. As you know, authoritative agencies can ask for this information. A representative of the United States DEA even acknowledged that their "actually hope" criminals continued to use Bitcoin because Bitcoin provided them with "many tools that could recognize people." In fact, without using any technology I will introduce, Bitcoin's anonymity is far less than that of traditional banking systems.

"The way of information leakage in the normal purchase process makes it easy to connect individuals with Bitcoin transactions they conduct with them. Even if the buyer uses additional privacy protection measures," is the same. "

Although there can be many improvements to improve privacy in the future, Bitcoin does not provide any better agreement -level anonymous mechanism, which is exactly the way most of the well -known cryptocurrency work. This system (usually called "pseudonym") is like writing with pseudonym. If the pseudonym has been associated with the user behind it, the protection disappears. Absolutely clear -this means anonymous treatment of all the contents of the user once published by the pseudonym. Because the blockchain is permanent, it is obvious that things that cannot be tracked in the future may become insignificant in the future.

Anonymous -What can we do with Bitcoin?

Hybrid service and decentralization hybrid

You can do something to make full use of Bitcoin. First of all, a centralized hybrid service can effectively mix your tokens with others' tokens. The mixed device, also known as Tumbler, works by receiving and returning the same amount of coins by using the independent bitcoin address, thereby breaking traceability and blurring any links between users. This is basically everything it does. This makes it difficult to track on the blockchain, but this is nothing more than ensuring safety by obscurity. Or, if you want, you can call it virtual money laundering.

The simplified process of the hybrid mechanism — each of the participants in A, B, C, and D created a transaction to centralized hybrid services. The service receives funds and sends the funds back to the address A, B ', C', D 'specified by the participants in the new transaction. From the perspective of blockchain observer, a new address a 'appeared when it received a transaction from Mixing Service, but it was difficult to say who initiated and paid.

In addition, there is a project called Coinjoin. It just works by combining transactions from multiple consumers to one transaction. This may sound similar to the mixture -the idea behind them is the same -the connection between the input and the receipt becomes blurred. However, Coinjoin technology is much higher. It is decentralized and does not need trust because of using multiple signatures between participants instead of some concentrated parties.

The simplified process of decentralized mixed -A, B, C, and D participants created a multiple signature transaction to send funds to the new address A, B ', C', D '. This type of transaction requires each participant to sign it with its own private key. There is no risk of being stolen at any time. From the perspective of blockchain observer, a new address a 'received a transaction, but it was impossible to know who created this specific output in A, B, C, and D. Only using blockchain analysis methods can only find all signatures, but not a-> a 'mapping.

Invisible address- "Invisible" recipient

The CoinjoIn mechanism is used to use some wallets (such as WASABI or Samourai) that focuses on privacy. These are one -time address generated by the sender using the oval curve Diffie -Hellman (ECDH) protocol for each transaction, so the different payment of the same receiver is unlocked. Its working principle is as follows:

The receiver has an ECDH key pair (B, B) (where B = private key, B = b * g = public key, G = EC base point)

The sender generates a disposable key pair (R, R) and transmits its public part of R to the receiver (usually in a single transaction

Calculate sharing secret: C = B * R = B * R * G

Developer Calculation Sharing Secret: C = R * B = R * B * G

The one -time address of this payment is: C * G + B

The receiver can use the corresponding private key: C+B, which costs funds from this address.

For those who are unfamiliar with EC cryptography: they cannot simply calculate the private key R with R = R * G and only know that R and G. The address generated. Such continuous use of keys will significantly increase the risk of the attacker's re -creation of the key. To eliminate this over -use, a dual -key stealth address protocol (DKSAP) was introduced. One key is used to spend money, and the other key is used to generate and scan disposable address. This technology has been adopted by Monero, TokenPay and Samourai wallets that has been mentioned.

Use the new address to receive payment

To protect your privacy, you should use a new Bitcoin address every time you receive a new payment. In addition, you can use multiple wallets for different purposes. This allows you to isolate every transaction of you in a way that cannot be associated with them. People who remit your money can not see the other bitcoin address you have and what you use. This may be the most important suggestion you should keep in mind.

Buy on the corner of the street

Therefore, the best way to achieve anonymity in Bitcoin may be: buy on the corner. Find anyone who can sell BTCs to you, face him face to face, reach a transaction and pay him with good old cash. Very simple.

There is a custody service called LocalBitcoins.com. It first holds Bitcoin until the cash payment is completed, so that both parties to the transaction are protected. You can find other parts of the seller nearby are Facebook.com, Meetup.com, etc. Of course, if you want to further strengthen your privacy, you can use VPN (or TOR) to search for sellers.

You can also consider using Bitcoin ATM, especially those who allow you to pay with cash. If they are indeed available in your area, they will be very useful. After all, mix your new token with one of the money launders of BTC. It's hard to keep up now.

Anonymous = pseudonym + unlocked

Now we are only one step away from understanding the real anonymity in the background of the blockchain. So, what is unrequited? When users interact with cryptocurrency networks, different interactions should not be interconnected. This may mean that it cannot:

Different addresses of the same user.

Different transactions of the same user.

Link the transaction sender to its receiver.

Are you considering a mixer again? Their purpose is the same, but they cannot guarantee anything because they cannot evaporate data from the blockchain. Compared with the pseudonym, anonymous is like writing without a pseudonym, so your identity information is definitely not leaked. This is provided by certain cryptocurrencies as one of the core functions of the agreement level.

"Your key, your Bitcoin. Not your key? Not your Bitcoin."

Private currency and others

Several other concepts can be implemented to specialize in anonymous problems in the cryptocurrency industry. Dash uses Privatesend (this is similar to Coinjoin to some extent), and Zcash realizes zero knowledge proof. There are Ring Signatures in Monero, and the Mimblewimble algorithm in Beam.

In this article, the challenge of anonymous transactions on public blockchain is described. I have proposed a series of solutions, and we can use these solutions to achieve this goal on the most popular cryptocurrencies such as Bitcoin or Ethereum, even if these coins do not really support anonymous. Fortunately, in addition, there are cryptocurrencies that mainly focus on privacy. They have implemented many mentioned mechanisms at the agreement level, thereby raising the anonymity of cryptocurrencies to a different level.

Zerocoin agreement

ZeroCoin is proposed to expand as a Bitcoin agreement to provide real anonymity for transactions. At present, it is not compatible with Bitcoin, but it can be used for independent ZCoin and Anoncoin cryptocurrencies (as well as PIVX, SmartCash, Navcoin, etc. Some of them have chosen to exit the Zerocoin protocol and migrate to other privacy solutions).

The agreement assumes that there is a temporary, agreement -level ZeroCoin token, exist on the basic blockchain. The anonymity provided here is obtained through separate Zerocoin minting and expenditure transactions. Minting is nothing more than burning some basic currencies (for example, Bitcoin) in exchange for Zerocoin tokens. The trick here is that you will receive a new token that does not connect with the coins you burned with you without historical records. A single Zerocoin token is unique and cannot be copied or forged. To exchanged it to the basic currency, the tokens' owners need to prove their actual ownership. This is completed through the Zerocoin expenditure transaction and depends on the above zero -knowledge proof. After the verification, the basic currency equivalent to zero currency noodles was drawn from the zero -currency custody pool. This may seem similar to hybrid services, but the agreement built -in cryptocurrency itself. However, Zerocoin needs a lot of calculation time to work (mainly by miners) and the root cause of many security issues. In any case, this protocol is the first batch of traceability issues based on UTXO (such as Bitcoin) traceability issues. One of the solutions.

Nickname

Blind signature is a digital signature that disguised the message before the signature. This mechanism allows signatures and messages to be different. To verify the signature, the message needs to be decrypted first, but such an operation does not explain the author's author. Blind signature schemes can be implemented on many common public key signature algorithms, such as RSA, DSA, and even on the oval curve. They are widely used in smart contracts, for example, when implementing anonymous electronic voting system.

How to delete my wallet and start again?

Web3 wallet, if you want to uninstall the Exodus Web3 wallet, or delete your wallet and start again, please follow the steps below.

Before deleting your wallet, you need to make sure you have recorded your 12 -character secret words to prepare for future needs: how can I always use my 12 -character secrets to access my wallet?

Step 1: Transfer your current cryptocurrency to temporary wallet

Option A: A temporary EXODUS desktop wallet.

Download Exodus Desktop and install it. We will use it as a temporary wallet.

Open the Exodus wallet you just downloaded and use this guide to restore your assets.

Options B: Temporary EXODUS wallet on the supported mobile devices

Please download Exodus Mobile on your Android or iOS mobile devices.

Now restore your 12 -character short words of your current Exodus wallet.

Step 2: Delete your current Exodus wallet to generate new wallets

Before deleting your wallet, make sure you have backup your current 12 -word secret recovery phrases and export a copy of the transaction history for your record.

Open your web3 wallet, then a) click the configuration file icon, then b) click the settings.

Click to delete the electronic wallet.

This will pop up a prompt to confirm that you really want to delete your wallet. Click to delete.

After clicking "Delete", this wallet will be erased from the device and cannot be removed. After completing this operation, only your 12 word phrases can restore the wallet.

Another confirmation page will pop up to ensure that you want to delete your wallet. Click to delete the electronic wallet.

Step 3: Open EXODUS to check whether you have a new wallet

In this step, all you need to do is to ensure that your Exodus Web3 wallet has generated a new wallet. If you see the welcome screen, your wallet is successfully deleted.

Step 4: Turn your funds back to your new wallet

You can transfer to the wallet you send the funds in step 1 and send them to your new Exodus Web3 wallet.

In this article, the technology that uses well -known cryptocurrencies to achieve a reasonable anonymous level. At present, Bitcoin is still the most widely accepted cryptocurrency. Others can still be used to pay a large number of goods and services, but usually through non -anonymous token payment platforms. In order to pay directly with cryptocurrencies, you may eventually have to convert your privacy currency with Bitcoin at some point to use them.