Privacy meter for Bitcoin transactions

en.cryptonomist.ch 2020-06-30 08:50
Reading time: ~2 m

Blockchair has announced the release of a new Bitcoin transaction privacy meter.

Today we release Privacy-o-meter — a tool for Bitcoin users and developers to assess the privacy level of their transactions. Many of you have heard about blockchain surveillance companies. Privacy-o-meter is the first step to defend yourself against heuristics they use. pic.twitter.com/g15TMgSYaw

— Blockchair (@Blockchair) June 24, 2020

This is the Privacy-o-meter feature built into its block explorer and API, and allows users to measure the privacy level of a transaction. 

Privacy-o-meter uses 50 heuristics to process the privacy level of a transaction, revealing how much information about the identity of the parties involved is made public by the transaction. 

In fact, Bitcoin’s blockchain, as is well known, is public, open, and transparent, so it can be analyzed by anyone. 

There are numerous blockchain analysis tools for tracing transactions, such as Chainalysis, Elliptical, CipherTrace and Crystal, but they are paid tools, accessible only to a few. 

Therefore, ordinary Bitcoin users rarely are able to perceive the level of privacy of their transactions, which often is not particularly high.  

Privacy-o-meter was launched precisely to help anyone verify the privacy level of a BTC transaction. 

Specifically, it uses some indicators including the number of transactions recorded on the public addresses used, the number of addresses involved, rounding, the possible presence of multisig, and other parameters. 

Generally, even wallet manufacturers, besides common users, do not pay much attention to raise the level of privacy of transactions, so that many do not even display alerts when the user sends a transaction set to have a low or very low level of privacy. 

This means that, compared to protocols such as Zcash, Monero and Dash, most transactions in the Bitcoin network are easy to analyze

Bitcoin does not have a native transaction obfuscation feature, which can actually compromise scalability, and mixers are often expensive and not easy to use.

For these reasons, despite what many believe, the average privacy level of BTC transactions is quite low

At the very least, once the transaction has been recorded, Blockchair’s new tool helps users to verify the effectiveness of the measures undertaken to safeguard their privacy.