Subject: Re: [Bitcoin-development] Privacy and blockchain data

From: "Jeremy Spilman" <[email-masked]>
Date: Tue, 07 Jan 2014 22:34:46 -0800

>
> 2) Common prefixes: Generate addresses such that for a given wallet they
>    all share a fixed prefix. The length of that prefix determines the
>    anonymity set and associated privacy/bandwidth tradeoff, which
>    remainds a fixed ratio of all transactions for the life of the
>    wallet.
>

Interesting thought to make the privacy/bandwidth trade-off using  
vanitygen and prefix filters.

But doesn't this effectively expand the universe of potential spies from  
'the global attacker' who is watching your SPV queries, to simply 'the  
globe' -- anyone with a copy of the blockchain?

Some stats on UTXO set size:  (slightly stale -- as of block 270733)

    7.4m unspent outputs
    2.2m transactions with unspent outputs
    2.1m unique unspent scriptPubKeys
    Side note: the top 1,000 scriptPubKeys have 10% of all unspent outputs.

Let's say you use an 8-bit prefix (1/256) that would be ~10,000  
transactions in the UTXO you would be monitoring. But if I knew a few  
different days / time-periods you transacted, I could figure out your  
prefix.

Of course, anyone you transact with would know your prefix outright.

Wouldn't this also allow obvious identification of spend versus change  
addresses in a transaction?