CBP Bitcoin Privacy and Anonymity Techniques 2

Question 1

What is PayJoin (P2EP) in Bitcoin?

Accepted Answer

A technique where the recipient also contributes an input, breaking the common input ownership heuristic

Answer

A payment protocol that splits a transaction into equal parts for privacy

Answer

A Lightning Network feature for routing private channel payments

Answer

A method of paying Bitcoin transaction fees via a completely separate transaction

Question 2

What is the Dandelion protocol (BIP156) designed to do?

Accepted Answer

Propagate transactions through a random path of nodes before broad broadcast, obscuring the originating node

Answer

Anonymously mine Bitcoin blocks without revealing the miner's IP address

Answer

Hide wallet balances from other nodes on the network

Answer

Generate untraceable Bitcoin addresses using zero-knowledge proofs

Question 3

What is coin control in a Bitcoin wallet?

Accepted Answer

The ability to manually select which UTXOs are used as inputs in a transaction

Answer

A feature that automatically consolidates all UTXOs into one output for simplicity

Answer

A network-level protocol that limits the maximum number of coins per address

Answer

A consensus rule that enforces the 21 million Bitcoin supply cap

Question 4

How does Taproot (BIP341/342) improve Bitcoin privacy?

Accepted Answer

It makes complex multi-signature and smart contract spending conditions look identical to simple single-key transactions on-chain

Answer

It encrypts all transaction amounts so they are hidden from the blockchain

Answer

It completely hides the sender's address from the public blockchain record

Answer

It prevents blockchain analysis tools from indexing Taproot-format transactions

Question 5

Why is a change output a privacy concern in Bitcoin transactions?

Accepted Answer

It creates a linkable output returned to the sender that reveals their wallet address for future analysis

Answer

A change output is a transaction fee that is paid back to the originating miner

Answer

Change outputs are always rounded to exact amounts to prevent dust accumulation

Answer

They are outputs automatically forwarded to a fixed exchange address for currency conversion

Question 6

What is the 'common input ownership heuristic' used in blockchain analysis?

Accepted Answer

The assumption that all inputs in a transaction are controlled by the same entity

Answer

A rule requiring that all Bitcoin transactions include at least two separate inputs

Answer

A consensus mechanism used to validate UTXO ownership transfers

Answer

A protocol for identifying which outputs in a transaction are coinbase rewards

Question 7

What is the privacy risk of UTXO consolidation?

Accepted Answer

Merging multiple UTXOs links their separate histories together, revealing they all belong to the same wallet

Answer

Converting UTXOs from one address type to another to improve cross-wallet compatibility

Answer

The automatic pruning process Bitcoin nodes use to remove old spent outputs

Answer

A miner's technique for combining multiple transaction fees into a single coinbase reward