14H·

Bitcoin: Satoshi Test and Address Reuse

My favorite Bitcoin exchange has wanted to implement a Satoshi test for quite some time now whenever I $BTC (+0,63 %) transfer funds from the exchange to my hardware wallet (Bitbox02). Until now, this hasn’t been a problem, since (strangely enough) the Sats test was accepted even when the Sats for the test came from a different address.

Recently, however, the Sats must come from the exact address to which the funds are to be withdrawn. Sure, this can be done via CoinControl. However, that would mean I’d have to use the same address twice for deposits, which isn’t ideal for privacy reasons, because: I first have to send a UTXO from my hardware wallet to the desired address, and then the coins are sent from the exchange to that very same address. So I can’t avoid making multiple payments to the same address.

The other option would be to simply send the coins to an address that’s already been verified. Here, too, I’d end up with multiple transactions, but it would save me the hassle of that stupid test.

Question for the Bitcoiners here on the forum: Which of the two options would you choose, and why? Obviously, privacy vis-à-vis the exchange is gone anyway. So it would only be a matter of inferences drawn from blockchain analysis.

Do you perhaps have any other practical methods?

10 Commentaires

Silas@Bein-Godik

13H

@stefan_21

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Stefan21@stefan_21

13H

What stock exchange is that? That's totally stupid🫣

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Chris@Psychedelic_Sunflower

13H

@stefan_21 Stuttgart Stock Exchange Digital Exchange

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user0e3jddwsjxu@user1d7gf8465j461735

@stefan_21 Hey Stefan, what's your current take on Bitcoin? How do you see it developing in the long term, and are you still using Strike for your savings plan? Best regards, and have a great weekend :-)

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Stefan21@stefan_21

@user1d7gf8465j461735 Hi there :)

Regarding Bitcoin itself:
I think we’re already relatively close to the bottom, but I could imagine there might be one last downward capitulation. That would at least be consistent with past cycles. In addition to my savings plan, I recently made another large purchase at just under 55k euros. Long-term, I remain bullish. Nothing has changed about its fundamentals :)

Strike doesn’t have a MiCA or CASP license yet, and as far as I know, it shouldn’t be able to sell to EU customers starting July 1.

This is a bit complex because relevant legislation has been rejected two or three times in Poland. As a result, Strike—with its European headquarters in Poland—currently can’t even obtain a CASP license… I don’t know what’s happening there right now—whether they’ve been granted an extension or have applied for the license in another country. There’s been no information whatsoever from Strike on this so far.

So I’ve moved my savings plan over to 21Bitcoin. With their new Auto Invest feature, they’ve basically copied Strike, and they also offer free savings plans. And the lack of communication on this topic from Strike is really getting on my nerves :)

Have a great weekend, too!

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Stefan21@stefan_21

13H

I would actually go with Option 2. Use an address that was verified earlier as your withdrawal address. And whenever you've accumulated enough, perform a UTXO consolidation to a new, unused address. I think that would be the least hassle for you :)

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Chris@Psychedelic_Sunflower

11H

@stefan_21 Would that also be the best option from a privacy perspective? Or are both options equally suboptimal?
Does UTXO consolidation change anything regarding the clear traceability of sats to a specific person?

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Stefan21@stefan_21

@Psychedelic_Sunflower In terms of privacy, Option 1 would be slightly better, but personally, it wouldn’t be worth it to me. The exchange knows your UTXOs anyway.

If you always have the sats paid out to the same address, an outsider could, of course, link them all together. But the question is, what are you trying to achieve?
For example, if you send a few of those sats to a friend now, they could theoretically figure out how many sats you’ve bought or own by analyzing the UTXOs. If you want to prevent that, it would be better to have the funds paid out to a new address. However, that would mean you’d have to run that stupid Satoshi test every time and first send something from a different UTXO to that address. That way, you’re essentially linking those two addresses together, but leaving the others independent of that.
For maximum privacy, no-KYC or P2P purchases would, of course, be the best option.

If you just want to hold onto it and maybe sell a portion on the Stuttgart Stock Exchange at some point in the future, I’d go with the option that requires the least effort on your part.
Or you could do what I do and set up a No KYC stack alongside your KYC stack. Then you’ll have both :)

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Stefan21@stefan_21

@Psychedelic_Sunflower UTXO consolidation allows you to combine multiple purchases. From the outside, it’s essentially clear that they all belong to the same person—though it could also be a sale or a transfer to a third party :)
UTXO consolidation is especially important so that you don’t have to pay excessive fees in the future if you have a lot of small inputs in your wallet :)

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Chris@Psychedelic_Sunflower

10Min

OK, thanks for your detailed response. I guess I'll just use the addresses that have already been verified.

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