Bitcoin and Tor have grown to be possibly the two most favored programs for maintaining privacy on the net. Developers are not looking to mend the two together making the Bitcoin network significantly stealthier.
Bitcoin’s primary developer, Mike Hearn claims that a future version of Bitcoinj, the program that powers many Bitcoin apps including Multibit, Hive, and Android Wallet, will route all connections via Bitcoin network over Tor’s anonymity network. When users of these apps buy or sell Bitcoins, their transactions are going to be sent through Tor’s system of three encrypted hops through computers all over the world before they reach the final Bitcoin node.
Hearn, who also works at Google as a engineer, states that he developed a prototype of the Tor-enabled Bitcoin software in January. An additional well-known Bitcoin developer who calls himself “devrandom” is trying to have the integration available to the public in around a month, Hearn added. When it’s launched, Hearn suggests the Tor upgrade to Bitcoin will depict a significant improvement on the privacy of Bitcoin’s deals.
“The fact I use Bitcoin isn’t a secret, but I don’t want all my transactions in an NSA database,” Hearn says. “When I use Bitcoin in a bar, I don’t want someone on the local network to learn my balance. The way Bitcoin is used today, both those things are possible.”
Apart from the record of Bitcoin trades saved on the blockchain, any individual capturing Internet traffic may also track the origin of a Bitcoin payment back to the IP address where it came from. As a result of that IP tracking, it’s “possible that the NSA and GCHQ have de-anonymized most of the blockchain by now,” Hearn adds.