...by Daniel Szego
quote
"Simplicity is the ultimate sophistication."
Leonardo da Vinci

Sunday, December 3, 2017

Blockchain FAQ - Privacy


Question: How private is my transaction or information on the blockchain ?

Answer: Well, it depends actually on the Blockchain, but in most cases all transactions are visible to everyone. Only the value for which address or for which person does a specific transaction related is hidden in several different ways. As an example Bitcoin uses generated one time addresses to hide that a certain amount of transactions are related a wallet. It makes however not impossible to make an implication on that a certain number of transactions were probably initiated by the same account. There are blockchain platforms that makes this implication easier, like Ethereum with not using many different addesses, or more difficult, like Monero, with built in mixers or or two levels of one time addresses. Certainly an address is not really associated with a personal information, however it is something that is usually not impossible to identify. True privacy can be probably reached only by off-chain private channels only between two endpoint working similarly as the payment channels or lightning network.