Privacy in Bitcoin
In the case of traditional payment systems mediated by banks and other financial institutions, a certain amount of privacy has been protected by restricting access to transaction information to the parties involved and trusted third parties.
In the case of Bitcoin, since all transaction information must be made public, privacy is instead protected by restricting the distribution of transaction information by making the public key anonymous.
This means, in essence, that while transaction information will be made public, it will not be known who the transaction belongs to.
The idea is that even if information that cannot be used to identify an individual is made public, it does not infringe on the privacy of the individual.
As a further security measure, a new public key can be issued for each transaction.
In this way, it can be made to appear that the transaction information is not gathered in one place.
In addition, wallet users can manage multiple public keys in one place.
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Risk of Private Key Leakage
When conducting Bitcoin transactions, it is necessary to sign the transaction with a private key that only you know.
If this private key is compromised, all of your past bitcoin transaction history will also be compromised.
In such a case, the UTXO will be revealed, causing damage such as bitcoin theft.
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