Tor can be dangerous, like exit nodes that log information like passwords and the like.
So a major question about the security of Bitcoin when using it with Tor (or any other proxy service) arises:
So what exactly does Bitcoin send when it connects to an IP?
Is everything encrypted that we send over the line?
Can someone ‘steal’ bitcoins by listening at the end of a proxy (or in Tor’s case an “exit node”)?
Speaking of security, we might just want to add a simple version checking procedure in bitcoin that will alert a user if s/he is running an “insecure version of bitcoin”.
True, sending by IP through Tor trades one problem for another. The Tor exit node can see the text of your message and potentially MITM you.
Best to only send to bitcoin addresses then. Payments by bitcoin address are broadcast over the network as part of the normal network traffic. All communications with the network are broadcasts of public information.
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