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Bitcoin Transactions via BitStamp Exchange Traceable

Bitcoin Transactions via BitStamp Exchange Traceable

As per the latest update in the Bitcoin space, the Bitcoin transactions made via BitStamp exchange are traceable, apparently. This revelation was highlighted by bitcoin security firm BlockTrail when they were reviewing the exchange activity for their internal monitoring. The issue came forth that the change address is being recorded in the system.

Ruben De Vries, BlockTrail CTO, confirmed that some addresses gave the same output which also happened to be the addresses that were created to send residual bitcoin from the transaction. Boaz Becher, CEO BlockTrail said that this activity gave clear picture of the BitStamp movement that included Bitcoin transactions as well as the deposits made.

Bitcoin Anonymity at Risk

One of the biggest and most touted features of Bitcoins is its ability to remain anonymous. However, this issue may end up revealing the transactions as well as the details of the end users and the clients.

BitGo, software provider of this digital currency would be able to gain access to this significant information and BlockTrail is already working on a way to fix this issue. Despite the highlighted flaw in the system, BitGo has not yet implemented into corrective methods so far. CEO of BitGo, Ben Davenport, admitted to be aware of this glitch for some time now and dismissed it as an insignificant issue.

He explains that the reason why they have not done anything yet to deal with this problem is that they need the change output to understand which output of a transaction changes when transactions are being listed. This information was critical because of the missing functionality in their indexer at the back end which has only been corrected in the last couple of weeks.

Security will not be affected

BitGo assured that the security of the transactions will not be compromised at any given point because they use multi-sig security element on their platform. However, the adoption of multi-sig technology in the wallets has been pretty low which means that BitGo has had no challenges in identifying the change address of the Bitcoin exchange for some time now and no potential issues have erupted so far.

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