The only defense to this future blockchain lockdown – the only way to prevent regulatory capture of Bitcoin – is CoinJoin technology. Coinjoin transactions prevent the “certainty of past ownership” custody chain that would otherwise be used to prevent “bad” coins from interacting in the walled corporate gardens. Currently, Wasabi Wallet is at the forefront of CoinJoin, but the code is open source and all global citizens are encouraged to contribute to the fight for Bitcoin Privacy.

A VanGogh by itself is a pretty picture, but when it is not accompanied by a “provenance” document that lists every owner since its creation, it is much less valuable. Without this chain of custody, how can the new owner know that this canvas is untainted by thievery?

We know that not all bitcoin is equal in the eyes of the establishment and that they have the tools to differentiate between different coin sources. Blacklisted Bitcoin already exists – try depositing any of the BTC taken in a famous hack (such as the one on Mt. Gox in 2014) to an exchange and not only will the coins be confiscated, the FBI and Interpol will be knocking down your door.

I believe it is only a matter of time before those with “good coins” begin a push for a world where whitelisting bitcoin is the norm “for your safety”. Those with wealth will inevitably attempt to concentrate it and what better way to do that than to lower the number of coins in circulation? If the total number of Bitcoin to ever be created is 21 million, it is even more valuable if there were to be only 10 million “valid, safe” Bitcoin.

Already, large corporations who wish to purchase Bitcoin are encouraged by miners to buy their “freshly minted, untainted” coins via a direct private transfer. Corporate legal departments want to have a custody chain going back to the original “coinbase” transaction that initially spawned the bitcoins for liability purposes. That’s fine for them but if they insist that everyone else do the same, Bitcoin becomes much less usable and much less friendly to small actors who cannot line up to the exclusive “Over the Counter” market set up by mining teams.

In an environment where only Bitcoins “with provenance” are valued by banks and exchanges, users who hold “invalidated” coins will be stuck with a currency they are no longer able to easily trade for another. All non-sanctioned coins will be assumed to be the profits of illegal activity. Honest cryptocurrency investors will be labelled as criminals and their wealth effectively confiscated by the existing old-world financial system.

This may seem far-fetched but it is not. Such a wealth redistribution will be done with the spin that it is “for our protection”. The Economist cover will read “Cleaning up Bitcoin’s Messy Past”.

There exists a future where any “bitcoin without papers” is nearly worthless, the way an unknown Rembrandt might be dismissed as worth only the canvas it was painted on. All it would take to turn this into reality is planting enough poison into the public consciousness. This is reminiscent of the old James Bond film in which the villain, Goldfinger, realized that to increase the value of his own gold stockpiles he didn’t need to steal the gold at Ft. Knox – all he had to do was contaminate it with radiation.

Without the concerted effort of millions of users actively caring about their privacy, the Bitcoin ecosystem is in deep trouble. The good news is that you can help, right now. First, we need to educate others about the issue itself. Then we can empower them to use the tools such as Wasabi Wallet that allow them to stand up for their rights. Talk to your friends and family today!

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To be a blockchain, each unit of data must reference the previous unit and contain a timestamp. By linking each record to the ones that have come before it the user can reasonably expect that the information in the past has not been altered – that is, that it is an accurate representation of the state of the system preserved throughout time.

Most blockchains are run as a public Peer-to-Peer network on open-source software. Each node has a copy of the distributed ledger. This decentralized trust model is less efficient than a central ledger that a bank might operate but not having to trust any one entity is a highly desirable feature.

While private blockchains have been proposed for use in business, none has been found to be viable as applications that do not require permissionless trust become needlessly less efficient.

Any given chain is only as secure as the difficulty of altering the chain maliciously. People value Bitcoin because it is a ledger of transactions that cannot be altered without great expenditure of energy.  

Ironically, the open nature of the bitcoin network allows blockchain analysis companies to view the behavior of individuals by following patterns in the chain.

Wasabi Wallet CoinJoin technology is critical to maintaining the permissionless usability of the bitcoin network.

The post The Differences Between Cryptocurrencies and Blockchain Technology. appeared first on Wasabi Wallet - Blog.

The truth is unless you bought it with cash or mined it yourself, your name is irreversibly linked to the Bitcoin blockchain by Blockchain Analysis groups. How can we protect our privacy? Wasabi Wallet provides easy access to the mathematical processes known as CoinJoin via open-source software that will allow us to break the clustering models and free ourselves from the tyranny of the information purveyors.

We don’t know how many Blockchain Analysis organizations exist. While we sometimes learn about privately-owned companies from their corporate filings or leaked sales pitches, state actors have no incentive to tell anyone. We could theoretically purchase access to expensive corporate tools that governments use to scan our own Bitcoin trail, but even then we must assume that the NSA and other state actors have databases of information better than anything the private sector could ever offer.

Bitcoin has an unchangeable ledger that can be audited by anyone at any time.  Soon after the popularization of blockchain technology by the darknet marketplace Silk Road in 2011, several groups such as Chainalysis began to gather data from multiple sources to build a large powerful database that tracked who was sending money to whom. Their goal is to combine the information available on the public blockchain with more and more private data. They “cluster” bitcoin addresses into an “entity” which they then label as an exchange, a marketplace or with an individual’s name.

It is easy to become part of the bitcoin network; just run the application on a computer. It’s so easy, in fact, we can assume interested parties have set up a large number of nodes to carefully record all activity. These “spy nodes” could make up over 10% of the Bitcoin network and we would not know it.

Let’s examine what information can be gleaned by watching the blockchain closely:

• Location of a transaction – which IP address sent the transaction to which Bitcoin Node
• Change addresses – small slivers of Bitcoin created on the fly as a result of most transactions
• Timing of a transaction – human behavior heuristics help here
• Input addresses – most critical – multiple slivers of Bitcoin spent at the same time are assumed to be from the same entity

The most problematic issue facing Bitcoin today is that it can be very easily associated with a person’s real-life identity. In order to comply with global regulations, Bitcoin purchasing websites require their users to supply driver’s license data to join. Further insight is gained by information sharing; all “Blockchain Alliance” members agree to share their combined information with law enforcement (and nearly every exchange in the world is a member).

Wasabi Wallet, unlike others of its kind, only sends data via the anonymizing Tor network which eliminates the IP address attack vector, and sends each transaction to a random bitcoin node. Wasabi provides detailed coin control so you know how anonymous each slice of your BTC is at any given time. Most importantly, Wasabi Wallet 2.0 performs a WabiSabi CoinJoin which puts multiple names on all coins fed into the privacy booster, breaking the multiple-input heuristic and making your bitcoin more anonymous (since you can’t remove your own name). Better yet, the more people that use Wasabi Wallet, the more secure we all become.

The future is bright if we all work together – Bitcoin Freedom isn’t free: it requires CoinJoins.

The post Blockchain Analysis: How it’s Used appeared first on Wasabi Wallet - Blog.

Bitcoin, as it stands, is very much traceable and censorable. In fact, Bitcoin without sufficient privacy protections provides perfect permanent records of your entire financial life; with sufficient analytics every transaction past and future will be on display for all to observe. This information allows surveillance the likes of which a totalitarian state could only dream. Nevermind governments, you wouldn’t walk into a nightclub and have your savings in large bills popping out of your pockets on display for all to see. The internet is one giant nightclub full of vicious criminals hanging out over in the corner, scanning the room and exchanging tips on how to ruin your day.

Wasabi has pioneered new techniques to protect Bitcoin anonymity. Instead of rubbing your name off of a coin, what if you wrote many thousands of names onto it?

Imagine you have a coin with your name on it. You meet up with fifty people at a certain time and everyone puts their coins into a hopper in the middle of the room. The original fifty coins then get melted down, and out of the coinjoin machine come fifty new coins that each have all fifty names on them! Now your name is on fifty coins and you have fifty names on your coin.  Repeated “coinjoins” only make someone watching more confused as more and more names get added to your coin.

If most Bitcoin has many names on it, the tracking done by governments, corporations and nefarious actors will be greatly hindered.

The upcoming Wasabi Wallet release is set to significantly improve the privacy of the entire space by making these operations seamless enough that access to coinjoin technology is accessible to all.

The post The Necessity of Bitcoin Privacy appeared first on Wasabi Wallet - Blog.