Take Silk Road, for example -- the topic of a recent Gawker piece. An IP accesses this site, which is known for selling narcotics illegal in the U.S. If this is a user's direct IP, anyone who can sniff the traffic of the site can trace that user back to their home address, assuming cooperation of the internet service provider.
However, if you first route your IP through Tor -- an anonymizing service, you can make it extremely difficult for anyone to trace you.
Silk Road is only available through Tor; it can't be accessed from the clearnet unless you use something like tor2web.
If you want more anonymity in Bitcoin, run it through Tor and have the setting noirc='1' in your ~/.bitcoin/bitcoin.conf. Also, Tor is more anonymous for you if you act at least as a middle node, what also helps the network.
Comments
Take Silk Road, for example -- the topic of a recent Gawker piece. An IP accesses this site, which is known for selling narcotics illegal in the U.S. If this is a user's direct IP, anyone who can sniff the traffic of the site can trace that user back to their home address, assuming cooperation of the internet service provider.
However, if you first route your IP through Tor -- an anonymizing service, you can make it extremely difficult for anyone to trace you.
Silk Road is only available through Tor; it can't be accessed from the clearnet unless you use something like tor2web.
Yes, but Bitcoin isn't necessarily anonymous:
https://en.bitcoin.it/wiki/Anonymity
If you want more anonymity in Bitcoin, run it through Tor and have the setting noirc='1' in your ~/.bitcoin/bitcoin.conf. Also, Tor is more anonymous for you if you act at least as a middle node, what also helps the network.