Privacy - Assessment 1

1. How does the traditional banking model achieve privacy for its users?

   1. By acting as a trusted guardian of the bank’s account holders data that is held on secured internal systems.

   2. By using banking industry standard cyphers disseminated through public information channels.

   3. By encrypting data to a public ledger.

   4. All of the above.

2. What is a major security flaw that has led to many of the instances in which theft and fraud has occurred against bank account holders?

   1. Account holders managing a multitude of accounts using the same login key.

   2. Not using network alert systems to detect incoming attempts to alter transactions.

   3. Outdated infrastructure and legacy frameworks adapted to digital needs.

   4. None of the above.

3. Because most outputs in Bitcoin are locked with a __________ i), it isn’t possible to remove all information about the __________ ii) from the transaction. By virtue of the fact that information provided to the payer is embedded in the transaction, the transaction itself ___________ iii), so care must be taken by the receiver to retain their own _________ iv).

   1. i) private key, ii) sender’s identity, iii) is fully public, iv) anonymity

   2. i) an input, ii) value of the bitcoins, iii) remains anonymous, iv) private accounting ledger

   3. i) digital signature, ii) identity of the paying party, iii) becomes a receipt, iv) anonymity when transacting

   4. i) script requiring a knowledge proof, ii) identity of the receiving party, iii) isn’t anonymous, iv) privacy

4. How can a Bitcoin user still remain private?

   1. Users can remain private by not publishing their details onto the ledger as part of the transaction. Both parties to a transaction can make separate records for accounting purposes.

   2. Users can remain private by separating digital signature data from the transaction. This excludes identifying information from the ledger and can be stored separately by the user.

   3. Users cannot be private when using Bitcoin due to the transparent nature of its distributed ledger.

   4. Users that wish to remain private must use anonymizing systems such as coin mixers and off chain payment channels to hide their transactions.