CBP Bitcoin Privacy and Anonymity Techniques

Question 1

What is CoinJoin in Bitcoin?

Accepted Answer

A technique that combines multiple users' transactions into one to obscure the transaction graph

Answer

A method of encrypting Bitcoin wallet seed phrases for added security

Answer

A process of merging two separate blockchains into a single chain

Answer

A protocol for generating new Bitcoin addresses automatically after each use

Question 2

What is a stealth address in Bitcoin?

Accepted Answer

A one-time address derived by the sender for each transaction, unlinkable to the recipient's public identity

Answer

A wallet address that is hidden from all blockchain explorers

Answer

An address used exclusively on anonymous dark web markets

Answer

A temporary address created during Lightning Network channel routing

Question 3

Why is Bitcoin address reuse harmful to privacy?

Accepted Answer

It links multiple transactions to the same entity, enabling transaction graph analysis

Answer

It causes the Bitcoin network to reject duplicate outgoing transactions

Answer

It increases transaction fees exponentially with each reuse

Answer

It invalidates the digital signature of all subsequent transactions from that address

Question 4

What is the primary privacy implication of Bitcoin's UTXO model?

Accepted Answer

Every unspent output is publicly traceable on the blockchain, enabling analysis of fund flows

Answer

UTXOs are encrypted and cannot be traced by third parties

Answer

The UTXO model prevents double spending but has no privacy implications

Answer

UTXOs are automatically mixed by the network each time they are spent

Question 5

What does BIP47 (Reusable Payment Codes) enable for Bitcoin users?

Accepted Answer

A single static code from which unique one-time addresses are derived for each payment

Answer

A protocol enabling batch payments to multiple recipients in a single transaction

Answer

A standard for scheduling recurring Bitcoin payments automatically

Answer

A method for generating deterministic hierarchical wallet seeds

Question 6

What is a Bitcoin mixing service (tumbler)?

Accepted Answer

A service that pools Bitcoin from multiple users and returns equivalent amounts to different addresses, breaking the on-chain trail

Answer

A hardware device that generates new private keys from entropy sources

Answer

A protocol for converting Bitcoin to other cryptocurrencies anonymously

Answer

A software tool that merges multiple wallet files into a single keystore

Question 7

How does routing Bitcoin transactions over the Tor network improve privacy?

Accepted Answer

It hides the user's IP address when broadcasting transactions, preventing network-level surveillance of transaction origin

Answer

It encrypts the Bitcoin blockchain data stored on the user's local node

Answer

It prevents wallet addresses from being indexed by search engines

Answer

It anonymizes the miner's identity when they claim a block reward