I've heard conflicting information as far as this goes.
Thinking this through- an adversary who's watching the block chain probably knows some inputs and some outputs. As in, these addresses belong to an exchange, these addresses belong to a hosting company.
Okay, fine. Now remember than any user can literally create wallets out of thin air, and in fact doing so is considered basic security hygiene. Let's say Joe User transfers one coin from one wallet to another wallet under their control. Let's say they do this 20 times, sometimes with the full amount, sometimes less.
How does the adversary attach an identity to those transactions?
Thinking this through- an adversary who's watching the block chain probably knows some inputs and some outputs. As in, these addresses belong to an exchange, these addresses belong to a hosting company.
Okay, fine. Now remember than any user can literally create wallets out of thin air, and in fact doing so is considered basic security hygiene. Let's say Joe User transfers one coin from one wallet to another wallet under their control. Let's say they do this 20 times, sometimes with the full amount, sometimes less.
How does the adversary attach an identity to those transactions?