Bitcoin limitations

Various limitations in bitcoin have also sparked some interest in altcoins, which were developed specifically to address limitations in bitcoin. The most prominent and widely discussed limitation is the lack of anonymity in bitcoin. This limitation is discussed in detail as follows.

Privacy and anonymity

As the blockchain is a public ledger of all transactions and is openly available it becomes trivial to analyse it. Combined with traffic analyses, transactions can be linked back to their source IP addresses, thus possibly revealing a transaction's originator. This is a big concern from a privacy point of view. Even though in bitcoin it is a recommended and common practice to generate a new address for every transaction, thus allowing some level of unlinkability, this is not enough and various techniques have been developed and successfully used to trace the flow of transactions throughout the network and link them back to their originator. Various methods to analyse blockchains...