Bitcoin

How Bitcoin and Tor Fail to Obscure Your Identity

(The Daily Dot) Privacy is a big concern for Internet users, not least when, say, they’re smuggling drugs. And as a recent experiment’s showed, two services heavily reliant on the promise of anonymity — the “untraceable” cryptocurrency Bitcoin, which facilitates the online black market Silk Road, and the Tor network, designed to obscure your location and Internet usage — have plenty of vulnerabilities when it comes to protecting identities.

Tor, for its part, was the subject of a study by the U.S. Naval Research Laboratory and Georgetown University called “Users Get Routed: Traffic Correlation on Tor by Realistic Adversaries.” In it, researchers found that the network’s security was even shabbier than previous reports had indicated. Although it uses thousands of relays to prevent traffic analysis, hackers — or “realistic adversaries” — with control of one or more routers can analyze where the traffic enters and exits Tor, using that data to pin down users’ personal details.

The threat from these potential adversaries pales in comparison to that of state-backed organizations. Not only can the National Security Agency monitor your activity on Tor, but joining the network makes the agency more likely to collect your data, according to leaked documents.