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How Blockchain Anonymity Is Maintained?

Posted on by Shipra

How is Blockchain anonymity maintained?

An assumption persists since long that cryptocurrencies such as Bitcoin were a refuge for criminals. This was because of their significant properties of being untraceable and being completely anonymous.

Meanwhile, as businesses and the general public grew more familiar with blockchain technology, it was becoming clear that the public transaction record of Bitcoin was, in reality, a gold mine of information for authorities. However, the issue of how anonymous cryptocurrency remains unanswered.

Difference between anonymity and privacy

To fully grasp the issue we’ll be discussing in this essay; we must first define those two – in reality, quite distinct – ideas. Anonymity “describes circumstances in which the actor’s name is unknown.” There is no mention of concealing the deed itself. In contrast, privacy is described as “the capacity of a person or group to seclude themselves, or information about themselves, and therefore express themselves selectively.”

Anonymity is about concealing the “who,” while privacy is about hiding the “what.” Anonymity in the context of blockchains refers to the capacity for parties to trade data without revealing any off-chain identifying information or previous transactions they have completed. Bitcoin, for example, is partly anonymous (each address is nothing more than a public key hash that seems random) but not private at all (we know all transactions done from/to that address

Blockchain Anonymity

Cryptocurrencies have sparked much interest from people, companies, and hackers, with Bitcoin once worth more than $5,000 per unit. Anonymity is one of the benefits of Bitcoin and other cryptocurrencies. However, there are worries that internet money transactions may not be as private as many would want.

There are many types of cryptocurrencies, the most popular being Bitcoin, Litecoin, and Ethereum. Altcoins are cryptocurrencies that were launched after the popularity of Bitcoin. Bitcoin, the father of all cryptocurrencies, mandates that the ledger, or record of transactions, be open to the public, making all transactions public knowledge. Many people are concerned about their anonymity and privacy as a result of this. In this post, we will look at some of the ways that cryptocurrency anonymity has been handled.

Bitcoin is regarded as pseudonymous

Fortunately, the blockchain doesn’t record everything. This means that the identities of the people involved in the transaction are not recorded. As a result, rather than being anonymous, bitcoin is pseudonymous. In many instances, though, one’s personal identity can be connected to one’s bitcoin address.

Bitcoin transactions with a person knowing that your identity exposes information that may be used for the identification of your past and future blockchain activities. Suppose, you send bitcoins to an online store, an exchange, or any business that collects client identification information. In that case, you allow them to connect that identity to your blockchain pseudonym, possibly exposing previous transactions you are involved in.

As a result, Bitcoin offers the ideal paper trail for law enforcement, tax authorities, and compliance experts. Because of this traceability, bitcoin theft becomes a much less appealing endeavor.

Of course, tools that launder bitcoin such as mixers,’ or tumblers’ have emerged. These services try to sever the paper trail by swapping one set of bitcoins for another, each with distinct addresses and transaction histories. But, these services come with limitations. They do not scale effectively for big quantities, and the laundering process is often traceable on the blockchain.

How can you purchase cryptocurrency anonymously?

  • Purchase it from a street vendor

This may seem suspicious, and it may even be counterintuitive to reveal your real identity at the time of purchase. However, if you do your homework, it is not as risky as it appears to be actually.

Bitcoin was exchanged in a particular manner in the early days. Bitcoin meetings would be held. Holders of the cryptocurrency would scream out prices. On the other hand, buyers used to come forward. After agreeing upon a particular price, cash would be exchanged for Bitcoin, sent immediately.

You may utilize services like Facebook, Localbitcoins.com, or Meetup.com to locate vendors in your area that you can get in touch with to exchange Bitcoin for cash. Additionally, you should utilize Tor, a VPN, and burner accounts to maintain more anonymity when you are searching and signing up for such events.

  • Purchase it at cryptocurrency or Bitcoin ATM

Purchasing Bitcoin at a cryptocurrency ATM isn’t always the greatest financial decision. To buy coins, Bitcoin ATMs mostly utilize APIs directly connected to cryptocurrency exchanges, and the person operating the ATM will surely charge a service fee for making the transaction.

They are, nevertheless, helpful for purchasing bitcoin secretly. However, one should choose their Bitcoin ATM wisely since some demand you to establish an account, thereby, exposing your name. You can go in, put some money in, and receive some bitcoin on a paper wallet for those who don’t. One may then transfer this Bitcoin to their preferred wallet using a mixer service. This will conceal its origin further and protect one’s identity.

Purchasing bitcoin by not disclosing your name is one thing. But, what one does with it may still expose your identity. Therefore, it’s important to be aware of how you’re utilizing your bitcoin at all times.

Techniques for preserving blockchain anonymity

1. Decentralized: Not under the control of governments

One of the most significant advantages of blockchain technology is its decentralized nature. Nobody has complete control over it. The blockchain of Bitcoin, for example, is maintained by hundreds of thousands of nodes. Hacking one percent, or even half, of the computer nodes, will not give you control over bitcoin.

To get power, you must launch a 51 percent assault on the whole blockchain. According to studies, a successful assault would cost $1.4 billion and months of effort. But, in exchange, you would have momentary control over the network and nothing to show for it monetarily since the coins would lose value immediately.

Blockchain communities rule themselves because they have such a high degree of security and no centralized authority. After all, self-rule was the original aim of bitcoin, and the policy was successfully handed down to all subsequent blockchain initiatives.

2.  VPNs and Tor

The best VPN and Tor services are both intended to protect the user and may be used to preserve anonymity. These technologies are utilized for both safety and privacy by researchers, journalists, businesses, governments, and others. Many bitcoin users with comparable worries utilize them as well. For example, many ransomware decryption tools are hosted on Tor as secret services.

VPNs are often used to conceal personal information while requesting bitcoin transactions. Both VPN and Tor can conceal a user’s personal information during a transaction by utilizing an alternative IP address or geolocation, which is occasionally customizable by the user. These technologies make it impossible for an attacker or analyst to observe traffic by correlating IP addresses and transactions. It may also be used to communicate with others, such as merchants while concealing your address from them.

VPNs are often used to conceal personal information while requesting bitcoin transactions. Both VPN and Tor can conceal a user’s personal information during a transaction by utilizing an alternative IP address or geolocation, which is occasionally customizable by the user. These technologies make it impossible for an attacker or analyst to observe traffic by correlating IP addresses and transactions. It may also be used to communicate with others, such as merchants while concealing your address from them.

3. CoinJoin

Typically, the back-end technology of decentralized mixers is the most frequently utilized technology. Gregory Maxwell proposed the CoinJoin protocol in 2013. The fundamental idea is that a group of payers combine their money and make a collective payment, obscuring the connection between payer and payee.

CoinJoin is made feasible because not every input in a transaction must originate from the same wallet or user. Because the signatures needed to verify a transaction are independent for each input, many users may agree to execute a single transaction to numerous unconnected payees. As a result, the information regarding which input paid which payee is not part of the blockchain and can be avoided.

CoinJoin is a critical tool for preserving anonymity since it serves as the foundation for numerous methods and implementations. SharedCoins, Darkwallet, CoinShuffle, PrivateSend, and JoinMarket are a few examples of implementations.

4. Ecosystems of Blockchain

Secure blockchain ecosystems can reduce many of the security risks associated with blockchain technology. However, using bitcoins to purchase items on Amazon does not provide much privacy. Amazon already has your name and address.

However, blockchain ecosystems that prioritize user privacy can remove all such risks. Blockchains may create secure chains that enable transparent, anonymous transactions ranging from product descriptions to purchasing and selling.

In the e-commerce industry, merchants post their products on the blockchain and enable customers to evaluate and verify the components used in their production. The transit of products from the shop to the delivery destination may be monitored safely without revealing any unnecessary addresses. Payments are made possible by digital currencies, and internet reviews help consumers discover the finest purchasing sites.

5. CryptoNote

A ring signature is a digital signature that enables one member in a group to sign on their behalf. This phase adds security by making it computationally difficult to identify which group members’ keys were used to generate the signature.

Conclusion

Bitcoin is a decentralized payment system that offers a method for obtaining numerous anonymous credentials, bitcoin addresses that may be used to conduct and receive payments. However, the previous study has shown that the system that utilizes such addresses may provide information about their owners. Furthermore, because all transactions conducted by the system are publicly accessible for study in the blockchain, it is possible to cluster various addresses belonging to the same user and classify certain usage.

Furthermore, if one of the cluster’s addresses can be linked to a real person, the payment history of the whole cluster may provide important information about that user. Although interesting research has been conducted in this area, the dynamism of the bitcoin ecosystem, which constantly modifies and improves bitcoin usage, implies that some of the hypotheses assumed for those blockchain analyses may not hold completely. Thus blockchain analysis still presents interesting open questions.

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All you need to know about the latest crypto scam on Twitter

Posted on by Shipra

Recently the twitter scammer took over a large leap, ever since the novice investors losing their money for the fake tweets about bitcoin went viral from verified twitter accounts of former US president Barack Obama, Amazon’s founder Jeff Bezos, and Microsoft’s CEO Bill Gates.

The Twitter accounts of major companies and individuals were utilized as a trap for common investors that were compromised on Wednesday. A maintained and well-planned mass attack over social media. Twitter continues to investigate this so-called coordinated social engineering attack. Apart from the mentioned names, renowned names and high-profile people who became targets of the scam included Mike Bloomberg, Joe Bidden, Kim Kardashian, Elon Musk, and Warren Buffet.

Jack Dorsey, co-founder and CEO of Twitter said that it was unlikely and too unbelievable for a social media platform like twitter, to get into the scam. The hacked accounts were made use of to send bitcoin scam messages inviting other twitter users, to send huge payments to a BTC address, with the assurance of getting it double in return.

What was the scam exactly?

The scam had hackers getting into high-profile user’s accounts, sending fake messages offering $2000 for every $1000 shipped to an anonymous twitter scam bitcoin address. For example, the tweet posted by Elon Musk’s account said: “the bitcoin sent to this address will be backed in double the amount if you sent $1000 on the below address, the returns become $2000”.

It turned out that whosoever worked the scam, made a lot from it according to blockchain.com tracking, the BTC account received as much as $118,211.37. The three richest profiles being, Musk, Bezos and Gates have a combined net worth of $366 billion, and the value of 1 bitcoin hovering around is $9,113

How did the scam hold grip?

The scam is suspected to happen though, the first few tweets that made the round from Bill Gates and Elon Musk’s accounts which were hitting bitcoin and were deleted too. Later, persistently the scale only got more significant from the hackers. Twitter made all attempts of completely restricting access to the breached accounts for the current situation.

Twitter mentions that all the targeted and compromised accounts have been taken into control, and hence have restricted their activity, including the ability to tweet for a few days. Assurances have been made, to restore access of the original account owner, securely. Twitter believes it to be a planned and coordinated engineering attack, that gave the world twitter scam 2020, and confirmed that hackers deliberately targeted some of the twitter employees with authority to enter the internal systems and tools. However, rapid steps are taken and re-installation of accounts for their ability to tweet is resuming, but it can take time.

Twitter’s response to the threatening scandal

Twitter mostly has a huge suspicion, that there can be a possibility of more malicious activity from the hacker’s point, who took over the high-profile accounts through employees’ access to twitter. Twitter is investing more behind the scam activities, which may include, stealing of data, or malicious conduct initiated through verified accounts and more.

It is highly unlikely for such a scam to take place taking into consideration the fact that this scam was very provoking in making successful dollar transactions done on random BTC accounts, that direct messages through such accounts were also sent as part of the hacking scheme.

Earlier, Jack Dorsy tweeted to the audience expressing the grieve and mentioning “Tough day for us at twitter”. Dorsy said the entire scam to be highly dubious and that its terrible that 2020, brought such a time for twitter. He also indemnified that diagnosis has been initiated and every detail about the scam will be shared as they get, to explain what exactly happened.

The scale of the hack was massive and marked its entry in some of the biggest scams globally over social media, with a reported revenue loss of $118,211.37. Twitter, for some days, has shut down the ability of tweeting. Majorly for those 359,000 additional verified accounts that were involved, including some of the named above if not all users.

Moreover, it has been confirmed that the hackers stole no passwords information amidst the scam, and all operations are terminated until the internal tools. Cybersecurity of all accounts are made more secure. The attackers managed to get hold over 130 small subsets accounts, and the activities over them have also been restricted.

In addition to this, even those accounts which were not directly related to the scammed will remain locked, as the investigation continues. It is yet not confirmed whether personal messages threads were compromised as part of the account takeovers along with non-public data related to these accounts. 

The experts take over the entire twitter scam 2020

Arjun Vijay, who is the co-founder of Giottus cryptocurrency Exchange, stated that such scams have already happened in the past, but this time the scale was unexpected. It was a well-planned and well-coordinated scam attack, where many verified accounts were deliberately chosen for the spread, and hence got hacked at the same time.

Along with this, the strange thing to notice was, direct messages floating into ordinary peoples account, and same tweets making the rounds directing towards the same scam site. Unfortunately, more than 373 users got trapped into the account for the global scam.

Many law enforcement investigations which also included the federal bureau of investigation are involved and activity probing the current situation over another angle of concern; that social media platforms like twitter are vulnerable towards exploitation and can be hacked.

As a result, the powerful site access tools went into the wrong hands from the twitter employees grip and exposed a serious threat over security and platform user’s data. The lawmakers are now hounding twitter over more transparency over the complete incident. The attack is sure to leave long-standing consequences.

Cybersecurity and Blockchain security

It was unbelievable to accept that the company’s own internal employee tools were compromised and used for the hack, which puts the system and security of a well-established social media platform like twitter in question.

Since the internal tools were made use of, even the accounts that claimed to have two-factor authentication were trapped into the bitcoin scam. All the messages circulated as a part of the hacking were directed over a common twitter scam bitcoin address (BTC address). The transaction was made, where through the blockchain security of twitter, Blockchain.com

Blockchain security is a chain of secured digital blocks, which contains records of transactions. Every block is connected to all blocks, before and after it all. This method makes it really difficult to tamper with any single record, as well as those which are associated with it to avoid any detection.

Conclusion

The primary lessons learnt from the biggest twitter scam 2020, is that there is no free lunch in the world. As an experienced novice investor, you should always ask questions and doubt such secure money-making schemes. Hackers have a complete grip over twitter, which was introduced, false bitcoin schemes as a more easy trap. People should remain more careful and aware and understand no opportunity gives quick money in a short time.

How blockchain technology is going to shape our future

Posted on by Shipra

Amor Sexton, senior innovation manager at Citi, walked us through the incredible potential of blockchain technology at Inspirefest 2017.

While excitement about the potential of blockchain technology has been brewing in the technology sector for some time now, the hype recently penetrated the mainstream as bitcoin furor has reached fever pitch.

At Inspirefest 2017, Amor Sexton, senior innovation manager at Citi, provided a clear and concise explanation of just what blockchain is for those of us scratching our heads at the term’s mere mention.

Sexton explained that, just like the shipping container, blockchain has the potential to provide a more secure and efficient way to transfer one of the most valuable modern commodities: data.

Though there are more than 100 different types of blockchain in existence, they all share one common facet: the use of a “shared digital ledger”.

This provides “a single source of data that all of the participants in the network can see, can contribute to and can trust that it is accurate”.

Though Sexton was quick to highlight that blockchain isn’t a ‘cure-all’, she explained that its ability to do away with a middleman in a transaction has the potential to reduce costs, create new business models and markets, and increase efficiencies.

Words by Eva Short

Admin Note: The post has been imported from: https://www.siliconrepublic.com/video/blockchain-amor-sexton

The Future Is Here: The Potential of Blockchain Technology

Posted on by Shipra

For all the investor hype around Bitcoin, which became an international sensation in the second half of 2017, the cryptocurrency still lacks the fundamental attributes of money and is behaving more like a speculative commodity. Ultimately, Bitcoin’s star could fade as rival cryptocurrencies overcome its inherent technical flaws and governments continue to crack-down on its use.

Blockchain technology, which is beginning to gain significant attention, possesses far more future potential than Bitcoin. There is just one snag, which has heretofore been largely ignored: energy use.

Bitcoin Basics

Created in 2009, Bitcoin is the first cryptocurrency released. For much of its existence, it was consigned to the periphery of finance, failing to generate much interest. However, in the latter half of 2017, Bitcoin mania descended upon investors who began piling into the cryptocurrency, with prices rising exponentially. To many, it was reminiscent of Dutch ‘tulip mania’ from the 1600s.

Bitcoin, unlike typical notes and coins, is not backed by a single central bank.

It was created by an unidentified developer who goes by the name of Satoshi Nakamoto; lending a certain mystique to the cryptocurrency.

Its developer purportedly developed Bitcoin as an alternative to national currencies because he was sceptical of the vast QE programmes national central banks undertook following the 2008 financial crisis.

Bitcoin is not alone as a cryptocurrency, although it garners most of the attention and has the largest market capitalisation. There are over 1,300 different types of cryptocurrencies and new ones spring up as creators try to overcome the technical challenges faced by rivals.

bitcoin-price

Bitcoin Basics

Bitcoin uses “blockchain technology.” This phrase has become synonymous with Bitcoin – in reality, most cryptocurrencies use blockchain technology. The blockchain, as it is commonly known, is a continuously updated, distributed digital ledger. It permanently records all transactions and, by design, it is practically unalterable.

Most importantly, it provides both parties with a transaction with the assurance provided by an unbiased third party, without the expense of intermediation. The word ‘block’ comes from the fact that transactions are bundled together to form a new ‘block’. Meanwhile, when it is created, it is combined like a ‘chain’ to all previous blocks.

The blockchain ledger replicates all historical transactions across millions of computers. This prevents a single user from tampering with history, as all records across the computers have to be in accordance with one another. Information can only be added to the blockchain, not altered. Furthermore, since transactions take place on the blockchain – which is public – a transaction of an item can be verified as unique. Finally, because the transaction does not require a third party (such as a bank) to adjudicate it, blockchain technology is decentralised.

Bitcoin transactions are ‘verified’ through a global computer network that performs the computational heavy lifting required to facilitate secure transactions. Verification takes place through the process of cryptography – mathematical code. Computers are required to provide a unique solution to a given challenge. This verification solves the double-spending problem. It prevents a user copying coins so as to appear to pay another user. Because this verification process is extremely energy-intensive, the bitcoin ‘miner,’ as they are known, who successfully solves the problem is rewarded with bitcoins for their efforts.

Moreover, computers are competing with one other to solve the challenge. There is an upper limit of 21

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million bitcoins that can be mined, and to date, 16.75 million have been mined. Therefore, individuals who verify the transactions will no longer receive a reward as the upper supply limit is reached.

The expectation is that once the supply of bitcoins has been exhausted, transaction fees will be introduced in order to maintain an incentive for ‘miners’ to continue to verify transactions. One must remember that the process of verifying transactions is extremely energy intensive and ‘miners’ therefore require a reward for their efforts. However, the introduction of transaction fees is likely to discourage users, as the transaction costs fall on them. This provides an opportunity for rival coins with a superior technological concept that have virtually zero transaction costs.

<h2″>The Problem of Power

The process of cryptography is extremely energy-intensive. Racks of powerful computer graphics cards are required to process advanced calculations to verify transactions. Some estimate the annual total power consumption from the ‘mining’ industry to be greater than that of Ireland. What is more, most of the Bitcoin activity takes place in China, which uses mostly coal-fired plants. In short, Bitcoin transactions are ‘killing the planet’.

So far, a crisis has been averted as ‘mining’ equipment has become vastly more efficient since 2009. But it is unlikely that such gains are repeatable indefinitely. There is also the question of what happens if cryptocurrencies eventually become widely adopted. While there is active research in the field, a breakthrough has yet to materialise. Energy consumption, therefore, remains a significant obstacle to worldwide adoption.

The Potential of Blockchain Technology

If Bitcoin, through the use of the blockchain, is designed to retire burdensome middlemen, what other bureaucratic authorities can blockchain technology help render irrelevant?

There is a lot of potential behind the use of smart contracts. Smart contracts are agreements that can be understood and executed using machines. This renders a third-party arbitrator irrelevant. Moreover, the smart contract can also perform due diligence duties. An example of a smart contract is a car lease programmed to prevent an individual from driving their car if they are seriously behind on their payments.

It is worth stressing that these concepts are in their infancy and are a topic of discussion rather than an inevitable outcome. In the case of the smart car contract, there is the issue of an individual, behind on their payments, being remotely blocked from driving their car in the case of an emergency. This would be unacceptable. Such inflexibility leaves complex problems that will require careful thought in order to have smart contracts that factor in the human quality of flexibility.

In a more positive example, blockchain technology could be used to create ‘coloured’ coins whereby certain properties are assigned to a currency. One such property would be the possibility to view previous transactions to see generally where the coin has been. This could be used to spot money from criminals or from sanctioned countries. Therefore, it would be possible for a user to block transactions from criminal individuals.

Finally, blockchain could prove to be a controversial technology, as all information is stored forever. This would appear to violate the right to be forgotten. In the end, a solution will need to be devised that affords sufficient privacy to users.

Conclusion

Blockchain technology could be another case where an adaptation of an original invention goes on to eclipse its original function. For example, the internet was born out of a US defence project (to provide resilient communications in the event of a cold war) that went on to revolutionise twenty-first-century business and communication.

Today, the internet’s spectacular rise leaves people wondering how they ever lived without it. Could blockchain technology go on to become another core utility, long after Bitcoin becomes obsolete? A lot still hinges on the ability to store and process vast quantities of data without expending unacceptable amounts of fossil fuel energy. At this stage, it is too soon to tell.

https://themarketmogul.com/blockchain-technology-potential/