Address Reuse
Using the same wallet address for multiple transactions, which reduces privacy by letting an outside observer link all of that address's activity together.
Address reuse means using the same wallet address repeatedly across multiple transactions, rather than generating a new address for each one — this reduces privacy, since an outside observer can link every transaction involving that address together, building a more complete picture of its holder's activity over time.
A hierarchical deterministic wallet (see Kaavon's "Hierarchical Deterministic Wallet" glossary definition) makes avoiding address reuse practical, since it can generate a large number of distinct receiving addresses from a single seed phrase, rather than requiring a user to manage many separate, unrelated keys.
Examples
- An outside observer can link every transaction involving a reused address together, building a more complete activity picture than they could from separate, unrelated addresses.
- HD wallets make avoiding address reuse practical, since they generate many distinct receiving addresses from a single seed phrase automatically.