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Bitcoin Privacy and Anonymity Techniques Flashcards

7 cards from real CBP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. What is PayJoin (P2EP) in Bitcoin?

    Answer: A technique where the recipient also contributes an input, breaking the common input ownership heuristic

    In PayJoin, the recipient adds their own UTXO as an input, which breaks the assumption that all inputs belong to a single sender, confusing blockchain analysts.

  2. What is the Dandelion protocol (BIP156) designed to do?

    Answer: Propagate transactions through a random path of nodes before broad broadcast, obscuring the originating node

    Dandelion propagates transactions in a 'stem' phase through a few nodes before 'fluff' (normal broadcast), making it significantly harder to identify the originating node.

  3. What is coin control in a Bitcoin wallet?

    Answer: The ability to manually select which UTXOs are used as inputs in a transaction

    Coin control lets users choose specific UTXOs as inputs, avoiding automatic merging of UTXOs from different sources that could reveal wallet history to observers.

  4. How does Taproot (BIP341/342) improve Bitcoin privacy?

    Answer: It makes complex multi-signature and smart contract spending conditions look identical to simple single-key transactions on-chain

    Taproot uses Schnorr signatures and MAST so that multisig and complex scripts appear as single-key spends when cooperatively satisfied, hiding internal contract details.

  5. Why is a change output a privacy concern in Bitcoin transactions?

    Answer: It creates a linkable output returned to the sender that reveals their wallet address for future analysis

    A change output returns unspent funds to the sender's wallet, and blockchain analysts can often identify it, linking it to the sender and their future transactions.

  6. What is the 'common input ownership heuristic' used in blockchain analysis?

    Answer: The assumption that all inputs in a transaction are controlled by the same entity

    Chain analysts assume all inputs in a transaction come from one wallet, allowing them to cluster addresses; CoinJoin and PayJoin directly break this heuristic.

  7. What is the privacy risk of UTXO consolidation?

    Answer: Merging multiple UTXOs links their separate histories together, revealing they all belong to the same wallet

    When consolidating UTXOs, all input addresses become publicly linked on-chain, potentially exposing that UTXOs received from different sources belong to the same wallet.