[Book Review] Anonymous Bitcoin: How to Keep Your Ƀ All to Yourself

anonymous-bitcoin-coverDisclosure: I received a copy of this book for free for review purposes. I’ve done my best to keep my review as objective as possible; it’s worth noting that I am an outspoken proponent of privacy, especially as it relates to one’s finances, and so the topic of this book especially appeals to my sensibilities. Therefore my bias here is towards financial privacy, not necessarily this book. All that having been said, it was a very good book. A more thorough review follows:

Midway through 2011, after nearly three years of research into the causes behind the global financial crisis of 2008, I found Bitcoin. Or it could be said that Bitcoin found me. I don’t remember where I first heard of Bitcoin, but I do remember that it kept returning to my radar until I could no longer brush it off: I had to dig deep into this new technology to find out what all of the excitement was about. I applied the same rigorous analysis to Bitcoin that I had applied to the financial crisis, and after dozens of hours of reading deep into the history of the cypherpunk movement, learning the technical details of cryptography from a layman’s perspective, and comparing Bitcoin to my knowledge of existing alternative currencies such as LETS systems and precious metals, I came to the conclusion that Bitcoin was special. Indeed, Bitcoin is beyond special – it is quite possibly the most important invention of the 21st century. The latter realization came later, but from early on I understood that Bitcoin was unlike anything that came before.

There was one feature of Bitcoin which I found both genius and troubling at the same time: the whole system is completely transparent. From the lowest level of the source code to the highest level of the transaction history, Bitcoin is completely open to the world for thorough inspection. From the perspective of someone skeptical of proprietary software and centralized systems, this excited me. From the perspective of a privacy advocate, this disturbed me. The saving grace which sold me on the system is that, if one is careful enough, Bitcoin addresses and their related transaction histories may never be tied to one’s identity, enabling the preservation of financial privacy. That saving grace, the ability to keep a Bitcoin address severed from a given identity, would be a topic of great interest to me, and I spent a lot of time learning about ways to prevent others from tracking the spending habits of any given Bitcoin address.

The good news is that newcomers to cryptocurrency no longer have to endure the many dozens of hours of research early adopters such as myself went through in order to feel comfortable with the technology. Many great researchers and authors have spent innumerable hours distilling the history, technical details, and best practices into easy to digest and understand articles, blog posts, and books. With Anonymous Bitcoin, independent computer security researcher Kristov Atlas has written the definitive book on Bitcoin privacy and anonymity. Starting from the (somewhat) hypothetical worst-case scenario that a local organized crime syndicate is out to steal your bitcoins, Anonymous Bitcoin shows how users of public ledger technology can keep their financial history private from investigators (“investigator” is the neutral term used in the book to describe someone who may want to scrutinize one’s activity on the public ledger). In the book, Mr. Atlas analyzes the current state of Bitcoin privacy (dismal) and describes the direction in which blockchain-based privacy technology is headed (promising). From clearing up misconceptions about anonymity to emphasizing the importance of internet hygiene, this book is a quick yet thorough how-to guide that leads the reader from transparency to anonymity with easy-to-follow instructions including pictures and helpful tips along the way.

One of my biggest takeaways from the book is that privacy technology as it relates to public ledger systems is a nascent but growing field. The explosion of interest in Bitcoin in the past year has brought hordes of new users into the fold, growing the available academic, financial, and developer resources substantially and leading to the research, funding, and development of promising privacy technologies such as Zerocoin, CoinJoin, Dark Wallet, stealth addresses, and more. Given the widespread support for such financial privacy technology, I look forward to the day when most of the content in this book is no longer necessary for privacy-conscious Bitcoin users to know. To be sure, Mr. Atlas has provided an excellent overview of privacy on the net, and the portions of the book pertaining to operational security, the separation of contextual identities, and maintenance of anonymity online in general will likely be relevant for years to come. But the day is rapidly approaching when the transaction history of a public ledger system won’t be as transparent as it is today. And it’s the excellent work of researchers such as Mr. Atlas that is helping to move the needle on this issue in the direction of more privacy and easier anonymity.

Financial privacy is an important issue for everyone who has something to hide: the employee who doesn’t want his co-workers to know how much he makes; the daughter who doesn’t want her parents to know she bought a pregnancy test; the executive who doesn’t want to reveal her company’s financial history to competitors; the blogger who wants to support a free speech organization without becoming a political target; the medical cannabis patient in California who doesn’t want to be arrested by the Feds for buying medicine from a legal dispensary; the issue of financial privacy touches many people in one way or another, and people shouldn’t have to forgo their privacy in order to participate in a promising new technology like cryptocurrency. For anyone who is interested in maintaining their financial privacy with Bitcoin, Anonymous Bitcoin is an excellent place to start; in fact, it may be the only resource on the subject you’ll ever need.