Bitcoin offers privacy—as long as you don’t cash out or spend it

“Using special algorithms, the researchers were able to associate large numbers of seemingly anonymous bitcoins addresses with certain major services such as exchanges and payment processors, said Sarah Meiklejohn, a doctoral candidate in computer science at UC San Diego, who assisted in the research. For example, they linked more than 500,000 Bitcoin addresses with Mt. Gox, a popular exchange in Japan where users buy and sell bitcoins. ‘We saw a lot of people deposit into Silk Road directly from their Mt. Gox address,’ Meiklejohn said. In those cases, law enforcement would have minimal work to obtain the name of a user if they presented a legal order to Mt. Gox.”

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