Blockchair Adds New Tool To Assess Privacy Scores Of Each Bitcoin Transaction
Blockchair Adds New Tool To Assess Privacy Score Of Each Bitcoin Transaction
July 3, 2020
Blockchair Adds New Tool To Assess Privacy Scores Of Each Bitcoin Transaction
Blockchair Adds New Tool To Assess Privacy Score Of Each Bitcoin Transaction
July 3, 2020

Multi-platform blockchain explorer Blockchair has added a “privacy-o-meter” feature for every Bitcoin (BTC) transaction that identifies which part is the change. This is a way to trace a chain of transactions on the blockchain.

Even though the Bitcoin blockchain is theoretically transparent, however, in practice it can be hard to identify the true flow of funds.

Unless the wallet is completely drained, every transaction includes at least two unspent transaction outputs (UTXO), where one of them is returned to the sender as change.

The blockchain explorer uses several basic and advanced heuristic to assign a privacy score.

For example, in a lower privacy transaction one of the recipient addresses is also a sender. This makes it trivial to understand which is the change.

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However, if one of the outputs is a round number, it is also likely to be the recipient of the transaction.

The system also analyzes technical clues like the type of the multi-sig that was used, the differences in script between inputs and outputs, as well as their ordering.

Identifying these kind of factors is the basis behind blockchain monitoring systems provided by companies like Chainalysis, Elliptic, CipherTrace, Coinfirm and others.

It appears that improper usage can make or break a privacy tool, thus making user education the key. Blockchair thus hopes to educate users on how to send Bitcoin without exposing themselves too easily. 


Source: Cointelegraph | Image: Unsplash

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Jafrin Ahmed

Crypto newbie passionate about creating resourceful content on blockchain technology, cryptocurrencies and decentralized apps.