Bitcoin is often considered the legitimate gold standard when a discussion about cryptocurrencies crops up between users and influencers. Since the introduction of Bitcoin’s Lightning Network, there has been an overall improvement in Bitcoin’s privacy. However, a major Bitcoin privacy flaw is still evident in about 54% of the crypto transactions. The issue traces back to the re-usage of addresses.
Oxt.me, a website, calculated an address reuse ratio formula which gave them an accurate take on the trends in which Bitcoin addresses were reused. The solution to their formula provided them with the percentage of addresses used over a particular time period that were not newly created, but was being reused.
According to the graph, there was a massive peak of about 77.63% address being reused back in February 2013. The percentage has since decreased as it was recorded to be around 41.34% around December 2017. There was also a spike recorded in July 2015, although it was likely due to the conduct of a “stress test” that month.
Since December 2017, Bitcoin addresses have been reused a lot more. In March 2019, the percentage recorded was exactly 53.57% of the total addresses that have been previously used.
According to longhash.com, it is considered immoral to reuse Bitcoin addresses because it weakens privacy for not only the entity that reuses the address, but also the next user on the blockchain, as they all interact through the same address.
Forbes reported that Veriblock, a project that uses Bitcoin OP_RETURN transactions in an effort to bring additional security, accounted for 20% of daily Bitcoin transactions. Most of the legitimate transactions hinted towards the fact that the Veriblock system reused addresses many times for their proof-of-proof activities.
However, the trend regarding regular reuse of address on the Bitcoin network took place roughly seven or eight months before Veriblock had any kind of significant impact on the Bitcoin Network.
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