Full Question from the Forum:
I have a privacy issue. I made a new receive address and gave it to s/o. Received ADA. Now I want to transfer it to someone else. I don’t want my sender address to be the address that was used to receive the ADA, because I don’t want person 1 to know details about where I transferred ADA to.
I have an idea that creating a new receive address also changes my sender address, but I’m not sure.
Example (Let A, B, C be Cardano addresses):
A -> B (Me)
B -> C
A should not know that I am doing business with C.
C should not know that I received ADA from A.
Is that feasible with Cardano blockchain?
Answer: This is the standard privacy problem with uTXo cryptocurrencies, as Bitcoin. Actually, they are not nearly as private as people have believed. But our new wallet have a better privacy default, which makes it much difficult to identify the change address. Refer to Edsko’s technical blog post on the Input Selection: https://iohk.io/blog/self-organisation-in-coin-selection/
Or if you are non-technical or prefer watching videos, check our Edsko’s presentation here: