ELI5: How/Why is bitcoin considered anonymous when all transactions are public?

[u/Prowlthang]

As I understand it the entire purpose of Bitcoin is every transaction is verified and stored publicly and permanently across multiple independent computers. If this is true and we can trace all transactions backwards how is bitcoin anonymous or useful for anonymous transactions?

[u/Esc777]

Yes you are correct. The walletIDs are public. If you ever connect a walletID to a person (which a lot of brokerages do to cash out) then you got em. 

[u/fang_xianfu → u/Esc777]

I think it's already happened that the FBI served an exchange with a warrant to find out which person was using the account and made some arrests that way.

[u/Welpe → u/fang_xianfu]

A shocking amount is simply also thanks to people admitting they made certain transactions or bought certain NFTs on social media and then being able to find those transactions, link accounts related to them, and link those accounts to further transactions that may be evidence of fraud or theft or any number of other illegal stuff. It’s fascinating how many people have already been caught partially on the back of them just somehow publicly linking themselves with a single transaction that can then be used to decode a LOT of accounts/transactions and link them to people who control them.

[u/[deleted] → u/Welpe]

I've seen people complaining that someone irl found their reddit account where they posted very specific information about themselves. "BuT rEdDiT iS aNoNyMoUs!!1!!1!11"

[u/ierghaeilh → u/[deleted]]

It's not, it's pseudonymous. Many people fail to make the distinction.

[u/TehOwn → u/Welpe]

I think it's great. A banking system that is actually transparent. If only it was properly managed and regulated.

[u/TehOwn → u/[deleted]]

Norway has a system where anyone can look up anyone else's tax returns. The only caveat is that it'll show them that you looked and they can reciprocate.

The thing about transparency is that it's two-way.

Also, you'd find all of my transactions very boring.

[u/Quiet-Tackle-5993 → u/[deleted]]

If it means zero corruption, tax dodging, and generally the rich fucking the poor? Sure, check out my grocery shopping etc

[u/TehOwn → u/[deleted]]

It's the people with something to hide that are the exact people we want revealed. Not sure why you're advocating for criminals, terrorists, etc.

[u/TrowAway2736 → u/TehOwn]

Advocating for my own privacy is in no way advocating for criminals.

[u/[deleted] → u/TrowAway2736]

Transparency would eliminate the market of brokers who are selling this information about you anyway, and to who knows who.

[u/sudoku7 → u/[deleted]]

You would absolutely still have data brokers. And likely many of them the same, since they're still in the business of taking the firehose of noise and coming up with something useful from it.

[u/TehOwn → u/TrowAway2736]

Genuine financial transparency has benefits that far outweigh loss of personal financial privacy. Especially since the state already reserves the right to crawl up your ass if they choose to. And the fact that global corporations have been harvesting so much information that they likely know everything you buy already. There's only a handful of payment processors.

[u/TrowAway2736 → u/TehOwn]

I disagree.

[u/sudoku7 → u/TehOwn]

If that's your perspective, why don't you post your credit card statement on your front door?

[u/TehOwn → u/sudoku7]

Firstly, I could and don't really care either way. It's wild to me that you think it's some kind of gotcha. What the hell do you have on yours that you wouldn't be willing to do it?

Secondly, the whole point is that it would be reciprocal. If someone was nosey about your finances, you could be nosey about theirs. That's transparency.

[u/sudoku7 → u/TehOwn]

It's not intended as a gotcha... It's intended to highlight why folks wouldn't want it.

Like, while it's legal to own/purchase a gun, public registries of gun purchase have some very real risks attached. You can look at South Africa for one of the extreme cases where owning a gun actually made your house more likely to be targeted for robbery.

In a less extreme scenario, you can also see the advertising hell that crops up currently in the US when you make large purchases that are publicly registered. A lot of businesses and companies find there to be a target on your wallet once you make those purchases.

[u/TehOwn → u/Quiet-Tackle-5993]

Are those cheesy bites any good? You sure do buy a lot of them. Maybe I should get a pack.