So BitLaundry is use when you want to send to addresses of people you don’t personally know or senders anonymity covered to recipients? if that is the case, as you have suggested, then I was wrong. Thanks for the info.
Its for removing links between the sender and recipient. 
Cool ! thanks. I really appreciate
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Alice uses BitLaundry to send funds to Bob. What information is hidden for Alice: sender, receiver or amount? How about for Bob?
For Alice neither sender nor receiver nor amount are unknown as she has to provide all of this in the first place. Merely the TXID (including the actual inputs that are used for ‘her’ transaction) and the time when the transaction is broadcasted remain unknown to Alice.
Bob, however, can not determine who sent the transaction or when it was initiated.
For an outside observer sender and receiver are not directly linked to each other on chain. -
Explain a situation where Alice’s and Bob’s privacy could be compromised?
For as long as the exact amounts to be transferred are not obscured (e.g. through junking them into smaller standardized portions that can be sent to multiple public addresses that belong to the same private key) an observer can link sent amounts to received amounts and match up Alice and Bob.
A low number of total transactions via any such service also makes it easier to connect both ends of the transaction. -
What is BitLaundry’s incentive to be honest?
Maintaining a good reputation is essential for continuously earning service fees. -
What is BitLaundry’s incentive to be dishonest?
Single transaction values – if stolen – might have higher value than slowly accumulated fees.
Holding important payments for ransom or using compromising data for blackmail could also be a tempting source of income.
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For Alice, the receiver’s (Bob) information remains hidden because she is sending BTC to a one-time-use address created by BitLaundry. For Bob, the sender’s information remains hidden because instead of Alice, BitLaundry is sending her Bitcoins to him using his address provided by Alice.
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If Alice creates a single transaction by sending 1 BTC to Bitlaundry and Bob receives that amount of BTC from BitLaundry, Alice’s privacy is compromised. While there is no link in the database between the receiver and sender, the amount of BTC remains unhidden and can be used to determine who originally sent the funds.
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BitLaundry is incentivized to earn 0.5% of the amount of bitcoin transferred in the transaction.
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BitLaundry can potentially send bitcoins locked to the one-time-use address to their address and delete the database link associated with that transaction. Such dishonest practices will negatively impact their service as they will lose clients.
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Alice does not know the public key of Bob, therefore she doesn’t know Bob’s UTXO’s and the transactions linked to Bob. She only knows the amount she sent to the one-time address on BitLaundry. Bob only knows the amount he received from Alice.
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When the amount of the transaction links both Bob and Alice together. Because the amount sent from Alice will be exactly the same as the amount received by Bob.
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BitLaundry takes a percentage of each transaction. If they compromise their honesty people will stop using BitLaundry and they have killed their business model
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If BitLaundry can make more money selling private information to a third party. BitLaundry can steal coins.
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- Receiver is hidden as she is given a one-time use address to send the funds to. Bob doesn’t know who the sender was as the address is one time use. Amount will always be public as the blockchain needs to track UTXOs.
- If Alice were to send her bitcoin to BitLaundry and in a very small chance Bob ended up with matching UTXOs then the history of those UTXOs could connect the two. This would require the service to be so little used that the only coins it had to send where the ones from Alice.
- They collect fees per transactions so being honest allows them to continue to make money on fees.
- They could collect the BTC that is coming through the platform and keep it.
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- Alice uses BitLaundry to send funds to Bob. What information is hidden for Alice: sender, receiver or amount? How about for Bob?
The privacy link is one sided and only really benefits Alice. Alice has successfully hidden the time of transaction and her address. The transaction from and then to Bob will appear in a different block.
- Explain a situation where Alice’s and Bob’s privacy could be compromised?
Bob might be seen as having received funds from Bitlaundry should another recipient of the transaction spill the beans or an investigator use the service themselves to see who is also receiving laundered money. The only risk to Alice would be the database link not being broken or any information that BitLaundry have on her compromised.
3. What is BitLaundry’s incentive to be honest?
They can continue to make a fee from users of their service as long as they are honest
- What is BitLaundry’s incentive to be dishonest?
They could potentially redirect the funds to wallets they control steeling money from clients in one big chunk.
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1.)Alice’s (sender) info is hidden from Bob
And Bob’s (reciever) info is hidden from Alice.
2.)Alice and Bob’s privacy could be compromised because of the specified amount. The amount itself could be traced to a particular transaction.
3.)Bitlaundry incentive to be honest in their continued patronage. If they continue to send money Bitlaundry continues to make money. But trust only goes so far.
Peer to peer is better.
4.)Bitlaundry’s incentive to be dishonest is more so because the senders and recievers would have no recourse to get their money back.
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- The sender and the receiver are hidden.
- For example, BitLaundry could be hacked. Or an attacker could control many BitLaundry nodes.
- BitLaundry wants to maintain a good reputation, therefore it remains honest.
- For example, someone could send a large amount of money to BitLaundry. Then, BitLaundry could decide that it’s better to run with the money.
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- Alice uses BitLaundry to send funds to Bob. What information is hidden for Alice: sender, receiver or amount? How about for Bob? — Alice can’t see receiver Bob public key, Bob can’t see sender Alice public key
- Explain a situation where Alice’s and Bob’s privacy could be compromised? — amount is still public, or if transaction is the only one in the batch
- What is BitLaundry’s incentive to be honest? — fee, being dishonest would lead to no one using the service
- What is BitLaundry’s incentive to be dishonest? — keep sent transactions if transaction is huge
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- Alice uses BitLaundry to send funds to Bob. The amount is know to both the sender and the receiver. The information hidden for:
- Alice: receiver
- Bob: sender
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If BitLaundry doesn’t delete the database link between Alice and Bob, then their privacy could be compromised. Their privacy could also be compromised if they’re unlucky and happen to be the only users of the BitLaundry at some given point in time.
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BitLaundry’s incentive to be honest is to gain reputation amongst the community so they can continue to benefit from the laundry fee.
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BitLaundry’s incentive to be dishonest are bounties from authoritative bodies for catching criminals. Such bodies may include the CIA, FBI etc. There are other incentives such as selling the user data or using the data to look for high-net-worth individuals to be their next potential victims of scams they themselves have deployed on the internet.
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Bob’s and Alice’s address are not linked, because there is no direct transfer between them and Bob isn’t able to see Alice’s public key.
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Onchain analysis shows an incoming transaction to bitlaundry for an amount and an outgoing transaction for the same amount from bitlaundry. This could link the addresses to each other.
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BitLaundry is incentivized to protect users privacy so they can remain in business collecting transaction fees from the users.
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BitLaundry could steal coins from its users in a scam situation or sell data to others.
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Alice uses BitLaundry to send funds to Bob. What information is hidden for Alice: sender, receiver or amount? How about for Bob?
Alice can’t see receiver and Bob can’t see sender. -
Explain a situation where Alice’s and Bob’s privacy could be compromised?
Not enough “real” people in the anonymity set so that when someone or some tx is compromised, it degrades the integrity of the original privacy. -
What is BitLaundry’s incentive to be honest?
The fee they take in. Am I naive if I also want to say another incentive to be honest is the altruistic desire to see humanity able to enjoy financial freedom AND privacy??!!
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What is BitLaundry’s incentive to be dishonest?
Potentially an awful lot of BTC depending on tx size. I imagine they would be able to take quite a few BTC before people caught on (less so in the current space but certainly more so in 2011).As a side note, Can you imagine paying 1 BTC fee today??? LOL!!
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alice doesn’t see that it came from bob and vice versa because they send/recieve from BL.
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if there would be low volume in tx on BL then they could be linked easier by tx amount
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being paid a fee makes them stick to being honest other way they will lose buissnes.
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once they recieve the funds they really don’t need to send them to bob. no contract, word agreement that can go wrong fast
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Alice uses BitLaundry to send funds to Bob. What information is hidden for Alice: sender, receiver or amount? How about for Bob? |
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Explain a situation where Alice’s and Bob’s privacy could be compromised? | A potential privacy-compromising situation for alice and bob is that there aren’t very many bitcoins on bitlaundry when alice sends bob the bitcoins, and the bitcoins bob could receive could be alice’s, eliminating the whole purpose.
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What is BitLaundry’s incentive to be honest? | Money.
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What is BitLaundry’s incentive to be dishonest? | Money.
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Did you forgot to answer the first question?
- All addresses that hide connection between sender and receiver
- when there are little transactions
- To earn fees for service
- They are temporarily in possession of the transaction amounts and could take it at will
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By using BitLaundry, the receiver of Alice’s transaction is hidden, and the sender of Bob’s transaction is hidden. This would mean that it would be more difficult to link Alice and Bob.
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If there are not a lot of users of BitLaundry, and the database shows that Alice sent a certain amount of bitcoin and Bob received that same amount of bitcoin, then their privacy could have been compromised.
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BitLaundry is incentivized to be honest so that they can attract more users to their service.
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BitLaundry’s incentive to be dishonest is to steal bitcoin from users. By deleting the recipient’s one-time-use address from the database, there is no guarantee to the sender that the bitcoin really went to the intended recipient. BitLaundry could have created a one-time address of it’s public address for Alice to use, and Alice sent bitcoin to that address, thinking that she is sending bitcoin to Bob. Once the bitcoin is received, the one-time-use address is deleted from the database and BitLaundry has Alice’s bitcoin.
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Both of there address are not directly connect with each other.
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If either Bob or Alice private keys is exposed, it becomes possible to trace transaction.
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Reputation and collect fees is what a incentive keep BitLaundrys honesty.
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If the govt threatens them with criminal charges or just plain theft of peoples funds who use the service.
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