Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-26 Thread intrigeri
Hi,

Michael English:
>> Still, this doesn't answer my question of why the setting called
>> 'privacy' "helps to reduce blockchain UTXO". I would love to
>> understand, if someone is kind enough to explain it to me.

> I will try to explain to you what I think Electrum meant by reducing UTXO 
> bloat. I am
> not a good teacher, but I hope that this helps.

Thanks *a lot* for taking the time to explain :)

> Honestly, reducing UTXO bloat depends on the circumstance. I will explain a 
> few
> circumstances below. The UTXO set is most likely to be reduced by the 
> "privacy"
> setting in a circumstance where one address has received three or more inputs.

> There are three cases for transaction inputs and outputs:

> 1. Find exact change
> 1. This case is very unlikely unless transaction creation is hand
>optimized. For example, let's say that I want to donate 0.01 BTC
>to Tails ;) and I find that I have a UTXO of 0.012 BTC. I could
>decide to spend the extra 0.002 BTC to protect my privacy and
>save a small amount on transaction fees. In this case, the UTXO
>set is not changed since there is one input and one output.

ACK. Of course, this is less unlikely if one considers unspent outputs
that are held by *all* addresses in a wallet, but it's still unlikely
and that's a detail.

> 2.   Use Electrum's "priority" coin selection that uses older and
>larger value UTXO first
> 1. This case is likely to use a single large value UTXO and produce
>two outputs since one output has to be the change. The extra
>output created by this transaction could be considered "bloat."

Sure. And assuming it works exactly like that, on the long term this
contributes to ending up with tons of small unspent outputs that will
be hard to use without spending substantial fees, unless manually
combined with other, older/larger ones (been there, done that, not
exactly my cup of tea).

I have to say I'm a bit surprised that the algorithm works this way.
I find it a bit simplistic, but really I'm not pretending it would be
easy, or even doable, to make it better. From my (relatively newbie)
perspective, I would have expected that it would balance these two
factors with trying to 1. find exact change; 2. add tiny unspent
outputs to the transaction to optimize *future* fees and benefit from
the small fee required by the other, older/larger ones to avoid
increasing the fees for the transaction being constructed too much.
If the algorithm worked the way I would have naively expected, then
looking at unspent outputs held by *all* addresses would help with
reducing fees and UTXO bloat (compared to looking at only one
address), not only for the transaction that's being constructed, but
more importantly on the long run.

> 3.   Use Electrum's "privacy" coin selection that prioritizes the
>number of UTXO in an address (and also optimizes change which we are
>trying to avoid)
> 1. This case takes several medium to small value UTXO and combines
>them into two outputs. If the number of inputs are three or
>more, then this could be considered reducing UTXO bloat.

ACK.

Thanks again for teaching me and fixing my naive expectations!

Cheers,
-- 
intrigeri
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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-26 Thread intrigeri
anonym:
> I just spent an hour reading: […]

Thanks for diving into it.

> First, let me say that I absolutely do not want this feature documented for
> end-users. I'm not sure how this could be explained in less a way so a user 
> could
> make an informed decision without using thousands of words (with a thousand
> possibilities to misunderstand). So, yeah, either we enable this by default 
> in Tails,
> or we completely ignore it.

Fully agreed!

> Second, now I understand this feature better, and I feel quite convinced that 
> it
> makes sense for Tails: we can take a selfish stance were we don't care about 
> the
> potential negative effects this can have on the network and blockchain bloat; 
> then
> only other drawback is potential increase of transaction fees, but that seems 
> like
> a negligible effect to me. So, I say: let's do it!

Works for me.

Cheers!
-- 
intrigeri
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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-25 Thread Michael English

I just spent an hour reading:

* 
https://medium.com/@lopp/the-challenges-of-optimizing-unspent-output-selection-a3e5d05d13ef#.63vst18ff
* https://github.com/spesmilo/electrum/issues/1203

First, let me say that I absolutely do not want this feature documented for 
end-users. I'm not sure how this could be explained in less a way so a user 
could make an informed decision without using thousands of words (with a 
thousand possibilities to misunderstand). So, yeah, either we enable this by 
default in Tails, or we completely ignore it.

Second, now I understand this feature better, and I feel quite convinced that 
it makes sense for Tails: we can take a selfish stance were we don't care about 
the potential negative effects this can have on the network and blockchain 
bloat; then only other drawback is potential increase of transaction fees, but 
that seems like a negligible effect to me. So, I say: let's do it! If you want 
to speed things up, please create a ticket about this, and assign it to me. 
Mega bonus points if it contains a patch against 
config/chroot_local-includes/etc/skel/.electrum/config. :)

Cheers!

That's great news! I created issue #12177 and I uploaded the replacement 
config file.

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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-25 Thread anonym
Michael English:
> Anonym,
> 
>> Of course, mine too (and intrigeri's, I'm sure :)). Sorry for
>> frustrating you like this about something that is obvious for you,
>> but it indeed gets hard for us when we need to consider things we
>> have little or no clue about. And I'm sure you understand we cannot
>> just blindly trust and implement any suggestion we get.
> 
> Yes, I understand. I think that it is unlikely that other Tails users
> will give their opinion, so could we at least put this setting in the
> documentation? Otherwise, I guess that we will have to abandon it.

I just spent an hour reading:

* 
https://medium.com/@lopp/the-challenges-of-optimizing-unspent-output-selection-a3e5d05d13ef#.63vst18ff
* https://github.com/spesmilo/electrum/issues/1203

First, let me say that I absolutely do not want this feature documented for 
end-users. I'm not sure how this could be explained in less a way so a user 
could make an informed decision without using thousands of words (with a 
thousand possibilities to misunderstand). So, yeah, either we enable this by 
default in Tails, or we completely ignore it.

Second, now I understand this feature better, and I feel quite convinced that 
it makes sense for Tails: we can take a selfish stance were we don't care about 
the potential negative effects this can have on the network and blockchain 
bloat; then only other drawback is potential increase of transaction fees, but 
that seems like a negligible effect to me. So, I say: let's do it! If you want 
to speed things up, please create a ticket about this, and assign it to me. 
Mega bonus points if it contains a patch against 
config/chroot_local-includes/etc/skel/.electrum/config. :)

Cheers!

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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-25 Thread Michael English

Anonym,


Of course, mine too (and intrigeri's, I'm sure :)). Sorry for frustrating you 
like this about something that is obvious for you, but it indeed gets hard for 
us when we need to consider things we have little or no clue about. And I'm 
sure you understand we cannot just blindly trust and implement any suggestion 
we get.



Yes, I understand. I think that it is unlikely that other Tails users 
will give their opinion, so could we at least put this setting in the 
documentation? Otherwise, I guess that we will have to abandon it.


Cheers,
Michael English
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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-25 Thread anonym
Michael English:
> Anonym,
> 
> Please Cc me with any replies. For some reason, I am unable to subscribe to 
> the list.

Got it!

> Anonym:
>> Note that I haven't chimed in with my opinion yet. :) I think intrigeri
>> is just careful: privacy features are routinely exaggerated in their
>> efficacy and can easily have many unexpected effects; for instance,
>> playing with such parameters often introduces fingerprintability
>> ("this user seems to have enabled the non-default feature X, which
>> Tails enables, so +1 indication that this is a Tails user"). It's
>> hard to weigh weigh such advantages and disadvantages against each
>> other, especially when the domain (blockchain) is not well-known,
>> which at least is the case for me (intrigeri has read up in the past
>> weeks for other reasons, so he's definitely in a better position to
>> evaluate).
> 
> Increased fingerprintability is not at all relevant here. Consider
> adding uBlock Origin to the Tor Browser as an example of increasing
> the fingerprint left by Tails users. Websites could check whether a
> client using Tor is blocking ads to narrow down that the user is a
> Tails user. The coin selection that I recommend changing happens
> entirely offline. No remote servers are involved in the creation of a
> new transaction. Once the transaction is broadcast to the Bitcoin
> network, the fingerprintability actually goes down as the transaction
> looks more generic. Remember that all transactions will have inputs
> and outputs that appear the same to the network. The change here is
> selecting inputs that reveal less about the user’s total bitcoin
> balance.

Note that "fingerprintability" was an example said in the spirit of "deviating 
from the default options often makes observers able to partition users" [0]. 
I'm happy to hear this feature in fact will defend against that somewhat. FWIW, 
with my extremely limited understanding of the blockchain, what you say sounds 
pretty convincing. :) 

[0] "4. Case study: against options", 
https://www.freehaven.net/anonbib/cache/usability:weis2006.pdf

>> So, if the decision comes down to me, I'd delegate to our community.
>> That's also hard. Now we have two voices in favour, none against,
>> and some probably good arguments for those that know how the
>> blockchain works. If we can get some argument why enabling this
>> feature won't have nasty consequences (e.g. increased
>> fingerprintability) and get some more people to join in support for
>> this change, I'd do it. I am afraid this is the best I can do.
> 
> Is anyone else in favor or against this change?

I wouldn't count my vote, due to my blockchain ignorance. :)

> My attempt is to make privacy a default option in Tails.

Of course, mine too (and intrigeri's, I'm sure :)). Sorry for frustrating you 
like this about something that is obvious for you, but it indeed gets hard for 
us when we need to consider things we have little or no clue about. And I'm 
sure you understand we cannot just blindly trust and implement any suggestion 
we get.

Cheers!

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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-25 Thread Michael English

Anonym,

Please Cc me with any replies. For some reason, I am unable to subscribe 
to the list.


Anonym:
> Note that I haven't chimed in with my opinion yet. :) I think intrigeri
> is just careful: privacy features are routinely exaggerated in their
> efficacy and can easily have many unexpected effects; for instance,
> playing with such parameters often introduces fingerprintability
> ("this user seems to have enabled the non-default feature X, which
> Tails enables, so +1 indication that this is a Tails user"). It's
> hard to weigh weigh such advantages and disadvantages against each
> other, especially when the domain (blockchain) is not well-known,
> which at least is the case for me (intrigeri has read up in the past
> weeks for other reasons, so he's definitely in a better position to
> evaluate).

Increased fingerprintability is not at all relevant here. Consider 
adding uBlock Origin to the Tor Browser as an example of increasing the 
fingerprint left by Tails users. Websites could check whether a client 
using Tor is blocking ads to narrow down that the user is a Tails user. 
The coin selection that I recommend changing happens entirely offline. 
No remote servers are involved in the creation of a new transaction. 
Once the transaction is broadcast to the Bitcoin network, the 
fingerprintability actually goes down as the transaction looks more 
generic. Remember that all transactions will have inputs and outputs 
that appear the same to the network. The change here is selecting inputs 
that reveal less about the user’s total bitcoin balance.


> So, if the decision comes down to me, I'd delegate to our community.
> That's also hard. Now we have two voices in favour, none against,
> and some probably good arguments for those that know how the
> blockchain works. If we can get some argument why enabling this
> feature won't have nasty consequences (e.g. increased
> fingerprintability) and get some more people to join in support for
> this change, I'd do it. I am afraid this is the best I can do.

Is anyone else in favor or against this change? My attempt is to make 
privacy a default option in Tails.


Cheers,
Michael English
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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-25 Thread anonym
Michael English:
>> Anyway: I personally don't feel responsible for maintaining the
>> Electrum integration in Tails, would rather not to become more
>> involved into it, and will therefore let its maintainer (i.e. anonym)
>> make the call. But I'm genuinely curious about the unspent outputs
>> optimization claim; I bet my intuition is wrong, and I'll learn
>> something along the way :)
>>
>> Cheers,
> 
> Anonym, I did not expect this to be a controversial change. If you
> also think that it is controversial, then maybe we should keep it
> disabled and let the user decide.

Note that I haven't chimed in with my opinion yet. :) I think intrigeri is just 
careful: privacy features are routinely exaggerated in their efficacy and can 
easily have many unexpected effects; for instance, playing with such parameters 
often introduces fingerprintability ("this user seems to have enabled the 
non-default feature X, which Tails enables, so +1 indication that this is a 
Tails user"). It's hard to weigh weigh such advantages and disadvantages 
against each other, especially when the domain (blockchain) is not well-known, 
which at least is the case for me (intrigeri has read up in the past weeks for 
other reasons, so he's definitely in a better position to evaluate).

So, if the decision comes down to me, I'd delegate to our community. That's 
also hard. Now we have two voices in favour, none against, and some probably 
good arguments for those that know how the blockchain works. If we can get some 
argument why enabling this feature won't have nasty consequences (e.g. 
increased fingerprintability) and get some more people to join in support for 
this change, I'd do it. I am afraid this is the best I can do.

Cheers!

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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-24 Thread Michael English

Intrigeri,


Hi,

s7r:

intrigeri wrote:
The text was copied from Electrum man page.

Thank you!


UTXO's are basically the coins you can spend. The spendable coins are in
UTXO's, not in addresses. Addresses are just a smart crypto way to let
the world know in advance who has the right to spend a given UTXO.
Existing unspent outputs cannot be reused, they are burned and re-crated
entirely every time. So you cannot spend part of a UTXO, you spend it
all (practice does not recommend re-using addresses - it's true nothing
keeps you from receiving the change in the same initial address that you
spent from, but you'll have a different UTXO).

Yes, I had to learn all that last week already, but thanks anyway :)

Still, this doesn't answer my question of why the setting called
'privacy' "helps to reduce blockchain UTXO". I would love to
understand, if someone is kind enough to explain it to me.


I will try to explain to you what I think Electrum meant by reducing 
UTXO bloat. I am not a good teacher, but I hope that this helps.


Honestly, reducing UTXO bloat depends on the circumstance. I will 
explain a few circumstances below. The UTXO set is most likely to be 
reduced by the "privacy" setting in a circumstance where one address has 
received three or more inputs.


There are three cases for transaction inputs and outputs:

1. Find exact change
1. This case is very unlikely unless transaction creation is hand
   optimized. For example, let's say that I want to donate 0.01 BTC
   to Tails ;) and I find that I have a UTXO of 0.012 BTC. I could
   decide to spend the extra 0.002 BTC to protect my privacy and
   save a small amount on transaction fees. In this case, the UTXO
   set is not changed since there is one input and one output.
2.   Use Electrum's "priority" coin selection that uses older and
   larger value UTXO first
1. This case is likely to use a single large value UTXO and produce
   two outputs since one output has to be the change. The extra
   output created by this transaction could be considered "bloat."
3.   Use Electrum's "privacy" coin selection that prioritizes the
   number of UTXO in an address (and also optimizes change which we are
   trying to avoid)
1. This case takes several medium to small value UTXO and combines
   them into two outputs. If the number of inputs are three or
   more, then this could be considered reducing UTXO bloat.



Routing transaction relay through Tor is only part of the solution. The 
blockchain is
a public ledger that can be analyzed anytime after the initial transaction 
broadcast.
Private coin selection impedes correlation of transaction inputs and outputs 
that
could link back to an identity.

Sure. I hope our doc clearly states that it's very hard to use Bitcoin
in a privacy-preserving way, for some various value of "privacy".

Agreed, but the setting indicated by Michael could be shipped as a
default imho. It makes sense in a context like Tails/Tor threat model.

Sorry if I was unclear: I'm not arguing this point. I didn't look into
it in details, so I am really not in a position to have opinion about
it yet. It's clear to me that there's no way to optimize coin
selection for all possible desired outcomes (e.g. optimizing the
blockchain itself, optimizing usage of unspent outputs i.e.
not wasting money via fees on the long term, optimizing some kind of
privacy on the short term), but it's not obvious to me which way Tails
should lean towards: at this point I have no idea if the (limited)
privacy benefits brought by this feature outweigh the drawbacks it
brings in other areas.


I think that the privacy benefits are more substantial than you think 
and transaction fees should be about the same. Consider the fact that 
the current method spends across multiple addresses in a single 
transaction confirming in that transaction and future transactions that 
a single identity owns all of those addresses.




Anyway: I personally don't feel responsible for maintaining the
Electrum integration in Tails, would rather not to become more
involved into it, and will therefore let its maintainer (i.e. anonym)
make the call. But I'm genuinely curious about the unspent outputs
optimization claim; I bet my intuition is wrong, and I'll learn
something along the way :)

Cheers,


Anonym, I did not expect this to be a controversial change. If you also 
think that it is controversial, then maybe we should keep it disabled 
and let the user decide.


Cheers,
Michael English
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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-24 Thread intrigeri
Hi,

s7r:
> intrigeri wrote:
> The text was copied from Electrum man page.

Thank you!

> UTXO's are basically the coins you can spend. The spendable coins are in
> UTXO's, not in addresses. Addresses are just a smart crypto way to let
> the world know in advance who has the right to spend a given UTXO.

> Existing unspent outputs cannot be reused, they are burned and re-crated
> entirely every time. So you cannot spend part of a UTXO, you spend it
> all (practice does not recommend re-using addresses - it's true nothing
> keeps you from receiving the change in the same initial address that you
> spent from, but you'll have a different UTXO).

Yes, I had to learn all that last week already, but thanks anyway :)

Still, this doesn't answer my question of why the setting called
'privacy' "helps to reduce blockchain UTXO". I would love to
understand, if someone is kind enough to explain it to me.

>>> Routing transaction relay through Tor is only part of the solution. The 
>>> blockchain is
>>> a public ledger that can be analyzed anytime after the initial transaction 
>>> broadcast.
>>> Private coin selection impedes correlation of transaction inputs and 
>>> outputs that
>>> could link back to an identity.
>> 
>> Sure. I hope our doc clearly states that it's very hard to use Bitcoin
>> in a privacy-preserving way, for some various value of "privacy".

> Agreed, but the setting indicated by Michael could be shipped as a
> default imho. It makes sense in a context like Tails/Tor threat model.

Sorry if I was unclear: I'm not arguing this point. I didn't look into
it in details, so I am really not in a position to have opinion about
it yet. It's clear to me that there's no way to optimize coin
selection for all possible desired outcomes (e.g. optimizing the
blockchain itself, optimizing usage of unspent outputs i.e.
not wasting money via fees on the long term, optimizing some kind of
privacy on the short term), but it's not obvious to me which way Tails
should lean towards: at this point I have no idea if the (limited)
privacy benefits brought by this feature outweigh the drawbacks it
brings in other areas.

Anyway: I personally don't feel responsible for maintaining the
Electrum integration in Tails, would rather not to become more
involved into it, and will therefore let its maintainer (i.e. anonym)
make the call. But I'm genuinely curious about the unspent outputs
optimization claim; I bet my intuition is wrong, and I'll learn
something along the way :)

Cheers,
-- 
intrigeri
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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-24 Thread Michael English

S7r,

Hello intrigeri, Michael,

intrigeri wrote:

Hi Michael,

Michael English:

It also helps to reduce blockchain UTXO (unspent transaction
outputs) bloat,

This makes me curious. How does this help with that property, exactly?
My intuition tells me that by restricting the set of coins that can be
spent to one single address, on the contrary, the software has fewer
possibilities to optimize towards 1. reusing existing unspent outputs;
and thus 2. avoiding to create more.

Also: where was this text quoted from?


The text was copied from Electrum man page. The privacy coin chooser
will not offer 100% anonymity, because that's technically not possible
in a system using a public blockchain, but it will obfuscate information
about sender's total BTC holdings so it's a plus.
Yes, I was relating this to routing the SPV validation through Tor which 
also obscures the addresses that a particular person owns. Without Tor, 
the bloom filters that SPV wallets like Electrum use are not very 
private at all.

UTXO's are basically the coins you can spend. The spendable coins are in
UTXO's, not in addresses. Addresses are just a smart crypto way to let
the world know in advance who has the right to spend a given UTXO.

Good explanation.

Existing unspent outputs cannot be reused, they are burned and re-crated
entirely every time. So you cannot spend part of a UTXO, you spend it
all (practice does not recommend re-using addresses - it's true nothing
keeps you from receiving the change in the same initial address that you
spent from, but you'll have a different UTXO).
Yes, when a transaction is created, all of the inputs must be spent in 
their entirety. Whatever coins do not need to be sent to another person 
are sent back to a "change address" which is a new address under the 
control of the spender. If there are still coins left after the 
destination address(es) and the change address(es), then it is 
interpreted as a transaction fee for the miners to collect.

Routing transaction relay through Tor is only part of the solution. The 
blockchain is
a public ledger that can be analyzed anytime after the initial transaction 
broadcast.
Private coin selection impedes correlation of transaction inputs and outputs 
that
could link back to an identity.

Sure. I hope our doc clearly states that it's very hard to use Bitcoin
in a privacy-preserving way, for some various value of "privacy".


Agreed, but the setting indicated by Michael could be shipped as a
default imho. It makes sense in a context like Tails/Tor threat model.

Yes, that is exactly my rational. Private coin selection is perfectly 
suited to the context of Tails. I like to think of it as similar to 
browser fingerprints in the Tor Browser. Onion routing and private coin 
selection reduces the "bitcoin fingerprint" left by Tails users.


Cheers,
Michael English
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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-24 Thread s7r
Hello intrigeri, Michael,

intrigeri wrote:
> Hi Michael,
> 
> Michael English:
>> It also helps to reduce blockchain UTXO (unspent transaction
>> outputs) bloat,
> 
> This makes me curious. How does this help with that property, exactly?
> My intuition tells me that by restricting the set of coins that can be
> spent to one single address, on the contrary, the software has fewer
> possibilities to optimize towards 1. reusing existing unspent outputs;
> and thus 2. avoiding to create more.
> 
> Also: where was this text quoted from?
> 

The text was copied from Electrum man page. The privacy coin chooser
will not offer 100% anonymity, because that's technically not possible
in a system using a public blockchain, but it will obfuscate information
about sender's total BTC holdings so it's a plus.

UTXO's are basically the coins you can spend. The spendable coins are in
UTXO's, not in addresses. Addresses are just a smart crypto way to let
the world know in advance who has the right to spend a given UTXO.

Existing unspent outputs cannot be reused, they are burned and re-crated
entirely every time. So you cannot spend part of a UTXO, you spend it
all (practice does not recommend re-using addresses - it's true nothing
keeps you from receiving the change in the same initial address that you
spent from, but you'll have a different UTXO).

>> Routing transaction relay through Tor is only part of the solution. The 
>> blockchain is
>> a public ledger that can be analyzed anytime after the initial transaction 
>> broadcast.
>> Private coin selection impedes correlation of transaction inputs and outputs 
>> that
>> could link back to an identity.
> 
> Sure. I hope our doc clearly states that it's very hard to use Bitcoin
> in a privacy-preserving way, for some various value of "privacy".
> 

Agreed, but the setting indicated by Michael could be shipped as a
default imho. It makes sense in a context like Tails/Tor threat model.



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Re: [Tails-dev] Set coin selection to "privacy" by default in Electrum

2017-01-24 Thread intrigeri
Hi Michael,

Michael English:
> It also helps to reduce blockchain UTXO (unspent transaction
> outputs) bloat,

This makes me curious. How does this help with that property, exactly?
My intuition tells me that by restricting the set of coins that can be
spent to one single address, on the contrary, the software has fewer
possibilities to optimize towards 1. reusing existing unspent outputs;
and thus 2. avoiding to create more.

Also: where was this text quoted from?

> Routing transaction relay through Tor is only part of the solution. The 
> blockchain is
> a public ledger that can be analyzed anytime after the initial transaction 
> broadcast.
> Private coin selection impedes correlation of transaction inputs and outputs 
> that
> could link back to an identity.

Sure. I hope our doc clearly states that it's very hard to use Bitcoin
in a privacy-preserving way, for some various value of "privacy".

Cheers,
-- 
intrigeri
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