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OBPP Report Reveals Bitcoin Wallet Privacy Concerns

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Improvements are desperately needed to keep Bitcoin independent and safe. If you’re like me, and you want to see more progress in this area in 2016, it’s time to vote with your wallet. Let companies know that you care about privacy, and choose the wallets that respond to this demand.

This was the clarion call put out by Kristov Atlas in the introduction of a recent report by the  Open Bitcoin Privacy Project (OBPP), a global not-for-profit organization focused on the improvement of financial privacy in the Bitcoin ecosystem. The organization’s mission is to raise awareness of privacy and risk assessment.

In this second report the Open Bitcoin Privacy Project has taken a more systematic approach and mainly focused on the many ways that privacy attackers can work, and the corresponding countermeasures that can be activated.

The report suggests that the Bitcoin wallet ecosystem hasn’t changed much since the last report. It also suggests that while there hasn’t been much innovation, and that wallets seem to be in a holding pattern, there is a desperate need for improvements in the ecosystem.

Even though the report considers that newcomers are consistently adopting HD architecture to avoid address reuse, many of the big privacy projects focused on “stealth” addresses and Tor support started in 2014 have stalled out during 2015, and an urgent need for innovation is increasing.

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The report ratings followed five different categories of privacy criteria:

  • Privacy from blockchain observers
  • Privacy from network observers
  • Privacy from transaction participants
  • Privacy from physical adversaries
  • Privacy from wallet providers

The report also evaluated usability and feedback.

Among 20 positions, the 4th most Private rated bitcoin wallets were:

  1.  Ledger
  2.  Breadwallet
  3.  Airbitz
  4.  Darkwallet
  5.  ArcBit

Notable among the results are the mediocre scores earned by even the highest-ranked wallets. Ledger scored a mere 50/100 points, with the next four wallets scoring between 45 and 49 points each. It was noted that some of the rankings changed from the last report not because of particular failures or achievements by various companies; rather, the increased amount of data criteria involved in the evaluations produced different results.

Popular bitcoin wallets, such as Armory, Blockchain, Mycelium and Electrum turned out to be rated far below from what could have been expected while Coinbase hit last place in the list. In order to give more transparency to the report, at least two professionally unaffiliated volunteers  were nominated to cross-check results and rate all wallets.

Following the growing privacy concerns, the report alerts the bitcoin community to the fact that there is an urgent need for consumers to protect their privacy and let companies know that they care about it. There are still many consumers that are not aware of privacy risks and OBPP suggests that companies and services should also increase their awareness around the privacy topic.