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Privacy
Date: October 31, 2008
Source: Bitcoin: A Peer-to-Peer Electronic Cash System
As an additional firewall, a new key pair should be used for each transaction to keep them from being linked to a common owner. Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.
Date: October 31, 2008
Source: Bitcoin: A Peer-to-Peer Electronic Cash System
The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone. This is similar to the level of information released by stock exchanges, where the time and size of individual trades, the "tape", is made public, but without telling who the parties were.
Date: February 11, 2009
Source: P2P Foundation
Subject: Bitcoin open source implementation of P2P currency
Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.
Date: November 25, 2009
Source: BitcoinTalk
Subject: Re: Repost: How anonymous are bitcoins?
For greater privacy, it's best to use bitcoin addresses only once.
Date: February 6, 2010
Source: BitcoinTalk
Subject: Re: Repost: Request: Make this anonymous?
You could use TOR if you don't want anyone to know you're even using Bitcoin.
Date: February 6, 2010
Source: BitcoinTalk
Subject: Re: Repost: Request: Make this anonymous?
Bitcoin is still very new and has not been independently analysed. If you're serious about privacy, TOR is an advisable precaution.
Date: August 11, 2010
Source: BitcoinTalk
Subject: Re: Not a suggestion
It's hard to think of how to apply zero-knowledge-proofs in this case.