"The main problem is that every transaction is publicly logged. Anyone can see the flow of Bitcoins from address to address (see first image). Alone, this information can't identify anyone because the addresses are just random numbers. However, if any of the addresses in a transaction's past or future can be tied to an actual identity, it might be possible to work from that point and figure out who owns all of the other addresses. This identity information might come from network analysis, surveillance, or just Googling the address. The officially-encouraged practice of using a new address for every transaction is designed to make this attack more difficult."
Not that you are saying they claimed otherwise and it is exactly your article that made me look through this page in detail, so thanks for that.
We actually wrote a sentence in our paper addressing this: "While there is an under- standing amongst Bitcoin’s technical users that anonymity is not a prominent design goal of the system, we believe that this awareness is not shared throughout the community."
Also, there is a gap between 'might be possible to work from that point' and actually trying to do it; and it is this gap that a lot of Bitcoin users are counting on. The idea is out there that while it might be possible to tie things together in theory, its really not doable in practice.
So, we knew that Bitcoin didn't try make hard guarantees of anonymity, but we wondered how well analysis would work in practice; and it turned out to be work much better than we expected.
The problem of linking accounts, too, turned out to give us a lot more information than we think most people would have expected.
We aren't trying to claim any more than that - some people will read this and say 'huh, obvious' but we think a large number of people will also be surprised this practically worked - we were.
"The main problem is that every transaction is publicly logged. Anyone can see the flow of Bitcoins from address to address (see first image). Alone, this information can't identify anyone because the addresses are just random numbers. However, if any of the addresses in a transaction's past or future can be tied to an actual identity, it might be possible to work from that point and figure out who owns all of the other addresses. This identity information might come from network analysis, surveillance, or just Googling the address. The officially-encouraged practice of using a new address for every transaction is designed to make this attack more difficult."
Not that you are saying they claimed otherwise and it is exactly your article that made me look through this page in detail, so thanks for that.