April 6th, 2018
Bitcoin is known for its anonymity and decentralization, two main features that garner the acceptance of this digital currency among people. But now it has come to light that Bitcoin transactions aren’t as anonymous as everyone had hoped. Web merchants routinely leak data about deals and this is enough to link individuals to their purchases. Cybersecurity researchers are looking to track down illegal deals using this digital currency, this is one of the reasons why Bitcoin is being banned in many countries around the globe. Bitcoin’s popularity is increasing and many online merchants are now offering people the ability to pay for their products using cryptocurrencies, like Bitcoin.
Is Bitcoin Really An Anonymous Technology?
One of the great promises of this new technology is the anonymity it offers its users, even though transactions are recorded and made public. So whatever you buy or purchase using Bitcoins, it can’t be specifically traced.
Security experts call this pseudonymous privacy. Users can preserve his or her privacy as long as the pseudonym is not linked, but as soon as anybody links the identity can be disclosed. All details become public. As soon as presale information and details are linked to a Bitcoin address, purchase history is also revealed. This raises concerns among people who are hoping to use it to make anonymous purchases. How easy is it to link personal information with Bitcoin transactions?
Experts say the way details are leaked during ordinary purchases make it a straightforward process to link individuals with transactions they make, even though purchasers are using additional privacy features. The main culprit here is cookies and web trackers – small pieces of codes which are deliberately embedded on the website to send information to third parties about how people use the site. Web trackers send information to Facebook, Google, and other sites to track page usage, browsing habits, purchase amounts and so on. In some cases, tracers can even send personally identifiable details such as your address, email, and name.
In this manner, all information about transactions gets leaked onto the web, where law enforcement agencies, governments, and malicious users can readily collect and analyze all transaction details. The question is here is how easy it is for hackers or malicious users to use this information to connect Bitcoin transactions to people. This process requires all personal information such as name, email, and address to link that with a particular Bitcoin address. The team began listing all major merchants who allow Bitcoin transaction. There are around 130 of them which include Newegg, Microsoft, Dell, and Overstock.
How Is Information Leaked?
Web trackers leak information from each site during the purchase process. Interestingly, research shows that at least 53 out of 130 sites leak payment information to around 40 third parties, mostly from the shopping cart pages. Most of these leakages are intentional for analytics and advertising purposes. Researchers claim that extra information is also sent. There are some merchant sites where far more severe information is leaked which directly reveals the exact transaction made on the blockchain to several trackers. This could mean bad news for people who hope that Bitcoin purchases are anonymous. Even though the exact transaction amount is hidden, it is still possible to link when the leaks include time of purchase and the amount.
There are some popular apps or services available which link users who want to make such payments and then allows them to pay, all while keeping their information hidden. This mixes with Bitcoin, making it tough to identify. Apart from that, there are various other ways that buyers can protect themselves using tools such as AdBlock Plus, Ghostery or uBlock Origin. These tools are commonly used, but can sometimes miss trackers. Using such defenses can be helpful and effective, but the reality is that they are far from being perfect. This is definitely depressing news for people hoping to preserve their privacy online. However, it will be satisfying to know that law enforcement agencies are using the same tricks to track nefarious activities, Bitcoin users using this system for the right reasons, have no need to worry.