Privacy and Anonymity Preserving Challenges in Bit Coin Transactions (original) (raw)
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Increasing Anonymity in Bitcoin
Lecture Notes in Computer Science, 2014
Bitcoin prevents double-spending using the blockchain, a public ledger kept with every client. Every single transaction till date is present in this ledger. Due to this, true anonymity is not present in bitcoin. We present a method to enhance anonymity in bitcoin-type cryptocurrencies. In the blockchain, each block holds a list of transactions linking the sending and receiving addresses. In our modified protocol the transactions (and blocks) do not contain any such links. Using this, we obtain a far higher degree of anonymity. Our method uses a new primitive known as composite signatures. Our security is based on the hardness of the Computation Diffie-Hellman assumption in bilinear maps.
Anonymous Alone? Measuring Bitcoin’s Second-Generation Anonymization Techniques
2017 IEEE European Symposium on Security and Privacy Workshops (EuroS&PW), 2017
This paper contributes a systematic account of transaction anonymization techniques that do not require trust in a single entity and support the existing cryptographic currency Bitcoin. It surveys and compares four known techniques, proposes tailored metrics to identify the use of each technique (but not necessarily its users), and presents longitudinal measurements indicating adoption trends and teething troubles. There is a tradeoff between the choice of users' preferred protection mechanisms and the risk that pertaining transactions can be singled out, which hurts privacy due to smaller anonymity sets unless a critical mass adopts the mechanism.
Blindly Signed Contracts: Anonymous On-Blockchain and Off-Blockchain Bitcoin Transactions
Lecture Notes in Computer Science, 2016
Although Bitcoin is often perceived to be an anonymous currency, research has shown that a user's Bitcoin transactions can be linked to compromise the user's anonymity. We present solutions to the anonymity problem for both transactions on Bitcoin's blockchain and off the blockchain (in so called micropayment channel networks). We use an untrusted third party to issue anonymous vouchers which users redeem for Bitcoin. Blind signatures and Bitcoin transaction contracts (aka smart contracts) ensure the anonymity and fairness during the bitcoin ↔ voucher exchange. Our schemes are practical, secure and anonymous.
RingCoin: An Accountable Mix for Achieving Bitcoin Anonymity
True anonymity may not be fully satisfied in Bitcoin. Linking transactions to input and output addresses to reveal user identity is possible. The author proposes a mixing scheme that modifies the mix coin protocol to hide the mapping of input transactions to addresses from the mixing server. The author used a ring signature scheme and an append-only log to achieve anonymity and accountability. The scheme ensures that transactions do not reveal any linkage between input transactions and retrieving addresses, and also, the mix does not store input transactions-addresses mapping. RingCoin achieves a higher degree of user anonymity against malicious mix and dishonest nodes.
Anonymity in Bitcoin: The User's Perspective
This article analyzes how users perceive the degree of anonymity provided by the Bitcoin network, to what extent they are concerned about anonymity when using Bitcoin, whether they are knowledgeable of and concerned about specific de-anonymization attacks, and if they are aware of and adopt privacy-preserving countermeasures. A user survey with 125 active Bitcoin users reveals that 70% associate a medium or high level of anonymity with the Bitcoin network and rate their concerns as either low or medium. But almost every fifth user has already considered abandoning Bitcoin because of being concerned about anonymity. Though one third are aware of the risk of de-anonymizing the Blockchain but are not concerned, another almost 50% indeed feel concerned. Our findings have implications for users and developers, suggesting that actions should be undertaken to increase privacy awareness and the level of anonymity provided by the Blockchain and the Bitcoin network.
Privacy Protection Issues in Blockchain Technology
IJCSIS Vol 17 No 2, 2019
Blockchain is an innovative application model that integrates consensus mechanisms, distributed data storage, point-to-point transmission, digital encryption technology and many other computer technologies. It has the characteristics of being decentralized, safe, reliable, open and transparent. In blockchain, digital encryption technology occupies the core position. The security of user information and transaction data is the necessary condition for the popularization of blockchain, and the development of cryptography technology promotes and restricts the further development of blockchain. This article describes the whole infrastructure of the blockchain with its different layers such as data, network, consensus, contract and finally application. Taking the bitcoin running process as an example, this paper analyzes the problems that the blockchain still has in the aspect of privacy protection, and introduces the existing solutions to these problems, including the mixed coin mechanism, 0 knowledge certificate, Ring signature and other technologies, expounds the outstanding problems and makes a prospect.
Enhancing Privacy and Improving Security in Scalable Blockchain
Journal of Southwest Jiaotong University
Bitcoin is a decentralized blockchain-based cryptocurrency that has taken the world by storm. Since its introduction in 2009, it has grown tremendously in terms of popularity and market cap. The idea of having a decentralized public ledger while maintaining anonymity and security attracted the attention of developers and customers alike. Special nodes in the bitcoin network, called miners, are responsible for making the network secure by using a concept called proof-of-work. A certain degree of anonymity is also maintained as no personally identifiable information of a person, like name, address, etc., is linked to the bitcoin wallet. In terms of bitcoin, a user is anonymous if different interactions of the user cannot be linked to each other or the user. Recent research shows that bitcoin is not as anonymous as it appears to be. The inherently public nature of blockchain technology makes it difficult to achieve privacy. The purpose of this paper is to review how varying degrees of ...
Anonymous Bitcoin v enforcement law
International Review of Law, Computers & Technology, 2019
Bitcoin is the most prominent cryptocurrency that is frequently debated nowadays, basically defined as decentralised 'currency', 'payment system' and 'investment tool' which is an opportunity offered by today's digital age. In this article, we aim to fulfil the analysis of the legal basis of the matter from both technical and legal point of view. Despite there are many legal issues related to Bitcoin, we will particularly draw attention to some of the fundamental legal problems caused by the anonymity feature of the Bitcoin. Among these problems that may arise, only the disputes that may fall within the scope of the cases relating to debt and asset which have an impact on enforcement law will be examined. We will discuss the anonymity feature, considering the possibility of accessing an anonymous Bitcoin wallet. The article examines the situation where a debtor or one of the parties in a lawsuit may conceal their assets unfairly via Bitcoin (with the anonymity feature) in civil disputes relating to debt and assets. Has Bitcoin turned into a tool that malevolent debtors can hide their wealth while at the same time, a secret place where they can invest their money? In this study, we will offer solutions on overcoming the anonymity feature in practice and how to reveal and reach the wealth that are stored via Bitcoin wallet. Likewise, it will be underlined what malevolent debtors or parties in a lawsuit who want to obscure their wealth via Bitcoin wallet can do to strengthen their anonymity. Finally, we provide a specific and practical guideline for judges and especially creditor's lawyers in order to reduce the potential adverse situation that Bitcoin's anonymity feature can cause.
2017 15th Annual Conference on Privacy, Security and Trust (PST), 2017
The most fundamental purpose of blockchain technology is to enable persistent, consistent, distributed storage of information. Increasingly common are authentication systems that leverage this property to allow users to carry their personal data on a device while a hash of this data is signed by a trusted authority and then put on a blockchain to be compared against. For instance, in 2015, MIT introduced a schema for the publication of their academic certificates based on this principle. In this work, we propose a way for users to obtain assured identities based on face-to-face proofing that can then be validated against a record on a blockchain. Moreover, in order to provide anonymity, instead of storing a hash, we make use of a scheme of Brands to store a commitment against which one can perform zero-knowledge proofs of identity. We also enforce the confidentiality of the underlying data by letting users control a secret of their own. We show how our schema can be implemented on Bitcoin's blockchain and how to save bandwidth by grouping commitments using Merkle trees to minimize the number of Bitcoin transactions that need to be sent. Finally, we describe a system in which users can gain access to services thanks to the identity records of our proposal.
Challenges in making blockchain privacy compliant for the digital world: some measures
Sādhanā
Due to the pandemic, most of the personal transactions relating to finance, commerce and healthcare services have gone online making privacy preservation a critical requirement. Consequently, privacy has been made a critical parameter in Data Protection Regulations leading to the search for such a privacy compliant system which is also resilient to attacks. A detailed analysis of the Blockchain technology, which is becoming popular for secure applications in the finance sector, indicates that there are several challenges relating to user identity, transaction linkability, crypto-keys management, data privacy, usability, interoperability, and post-quantum compliance of privacy regulations which need to be resolved before its widespread adoption. Being a decentralised system, there is a need to analyse the vulnerability to attacks of each layer in the Blockchain architecture. This paper discusses the development flow of some of the privacy enhancement mechanisms like ZKPs, SMPC, Ring signatures, Mixing, Homomorphic Encryption and quantum resilient computing, bringing out their features and lacunae. There is a detailed discussion of the privacy mechanisms adopted by blockchain platforms like ZCash, Zerocoin, Hyperledger, Wanchain, Coin Party, Monero, Cryptomate, MixCoin, Coinshuffle, PICNIC and New Hope. Every platform has some limitation or the other and it is essential that researchers come out with mitigation steps for the existing mechanisms and come up with improved new Privacy Enhancement Techniques. One such architecture using PET has been proposed.