Is the bitcoin Network Really Private?

If you are unfamiliar with the term, “Bitcoins” is an alternative name for digital currency. The protocol that underlies this digital currency is called the bitcoin protocol. In laymen’s terms, when you make a transaction of any kind using your debit or credit card, the transaction is considered to be made with a bill, bond, receipt or check. But, instead of a paper check, you are making the payment with a digital address known as a virtual address. These virtual addresses can be derived from a mathematical formula called “public key,” which is part of the bitcoin software program.

hotgraph A graph of this type shows a series of different addresses that have been used to “mine” the virtual public keys. What happens is that each time a transaction is made, a certain amount of money is transferred from the buyer’s computer (the” miner”), and then, it is dispersed to all of the other computers on the network who will in turn use the addresses as their own private key. This process goes on indefinitely and is referred to as “chainalysis.”

But, just like any other type of currency, this system has flaws. First, there is the inherent flaw of cryptography, which can be described as the ability to guarantee that the unspent transaction data set will be destroyed after a certain period of time. In order for this to happen, there must be a specific protocol in place that ensures that the addresses will remain private until they are needed again. The second major flaw that is related to the cryptocurrency is that it uses a trust model that is completely different from the conventional model of banking. While most people are familiar with the concept of a bank account and routing data, the way that the decentralized system of the cryptocurrency works is by utilizing public key infrastructure, or PKE, which means that instead of one single entity owning the keys, it uses a collection of entities instead.


While there are numerous theories that explain how this system of operation works, the truth of the matter is that nobody really knows for sure how these addresses are generated. However, the general consensus is that it uses a Pseudo Address, or AUTH, which is created by the generation of a random number. This statistic is then used to generate a series of pseudo-public information, or ARI, which basically functions as the fingerprint of the specific IP address and is what we use to trace and check the authenticity of a particular IP address.

While many people may not be too concerned about the privacy issues associated with this system, it is still important to understand what the Bitcoin Graph actually is. The bitcoin graph is actually a graph of the currency flow throughout the network, and while it provides a nice visual explanation of how the various transactions are made, it doesn’t tell the whole story. If you’re interested in studying the privacy problems involved in the system and the types of entities that are using this avenue to move money around, you’ll definitely want to pay attention to what the bitcoin graph actually shows. There is a lot more to the currency flow than simply what you see in the typical address graph