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Not so Anonymous -
Deanonymization of
Blockchain Users
Johannes Ahlmann
Cork Blockchain Meetup
2018-11-13
https://www.dailydot.com/news/anonymous-opfullerton-kelly-thomas/
Lightning Talk - Agenda
• Is Bitcoin anonymous?
• What is Deanonymization?
• Why should I care?
• What can I do about it?
• Where to get cryptos?
• Alternatives
Anonymity & Privacy
Anonymity
"They" can see what you do,
but not who you are
Privacy
Controlling who sees what
activities you engage in
https://d262ilb51hltx0.cloudfront.net/max/1610/1*d0KdwdeKDi5m8n-sZdr-_A.png
Anonymity 1/2
• Pseudonymity - People are aware of one or
multiple pseudonyms of yours, but not your
true identity
• Anonymity = Pseudonymity + Unlinkability
• Unlinkability
• Different actions of the same user should
not be linkable to each other
• Linking of addresses to users
• Linking of transactions to users
• Linking of senders to recipients
source: Prof. Murtuza Jadliwala
Anonymity 2/2
• Privacy vs. Decentralization
• Public Ledger is core component in
consensus and sharing state of the world
• Bitcoin is pseudonymous, not anonymous
• public addresses = pseudonyms
• much less anonymous, private than cash
• Many Bitcoins are acquired through
Exchanges or Mining Pools
• Relatively few merchants/ market
participants to trade with
What is Deanonymization
• Linking you to your addresses
• Linking you to your transactions
• Tagging, clustering of totality of
addresses, transactions
• Approaches
• Transaction Graph Analysis
• Realtime Network Analysis of P2P
network
Transaction Graph Analysis 1/2
Change Address Combined Addresses
Transaction Graph Analysis 2/2
• Bitcoin transactions are public
• Active collecting
• Mining pools
• Online wallets
• Exchanges
• Merchants
• Gambling
• Tagging clusters
• One tagged address in cluster tags all
cluster
• Bitcoin address should only be used once
An Analysis of Anonymity in the Bitcoin System
F. Reid and M. Harrigan, PASSAT 2011
Realtime Network Analysis
• "Attack" on the P2P Network
• Peers distinguished over set of its (8)
entry nodes
• Linking inputs
• Tagging clusters
Learning Entry Nodes
Realtime Network Analysis
• Linking of different transactions to same user
• Each peer is trying to connect to 8 entry nodes
• Network discovery
• Servers
• Receive incoming connections
• Max. 117 incoming connections
• Clients
• 8 outgoing connections
• Peers are distinguished over set of it’s entry
nodes!
Remediation
• Hierarchical Deterministic Wallets
• Random Address Pool Wallets
• Tor
• Mixers
• Who can we trust?
• Coinjoin
• How to find Peers?
• Anonymous cryptocurrencies
Anonymous Currencies
Monero - Ring signatures
Dash - Fork of bitcoin, coin-mixing service
Zcash - zk-SNARK, zero knowledge proofs
Verge - Tor and I2P network for privacy
Komodo - Fork of Zcash, zk-SNARK
Pivx - Fork of Dash, Zerocoin protocol
(Legitimate goods vs. legitimate worries;
how can this be used for good or bad?)
Thank You!
Resources
• https://coincenter.org/entry/how-anonymous-is-bitcoin
• https://bitcoinmagazine.com/articles/is-bitcoin-anonymous-a-complete-beginner-s-guide-1447875283/
• https://www.coursera.org/lecture/cryptocurrency/how-to-de-anonymize-bitcoin-qnS76
• https://www.slideshare.net/bhaslhofer/bitcoin-deanonymization-and-money-laundering-detection-strategies
• https://pwlconf.org/2018/giulia-fanti/
• https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/
• https://decentralize.today/a-new-attack-vector-to-deanonymize-bitcoin-users-9c6dc433d4b6
• https://www.deepdotweb.com/2017/04/20/how-companies-are-deanonymizing-bitcoin/
• https://www.slideshare.net/bhaslhofer/bitcoin-deanonymization-and-money-laundering-detection-strategies
• https://bitcoinsandblockchains.blogspot.com/2016/05/bitcoin-deanonymization.html
• https://btcmanager.com/u-s-department-of-homeland-security-create-bitcoin-deanonymization-tool/
• https://www.deepdotweb.com/2018/01/02/using-bitcoin-transaction-analysis-deanonymizing-users-tor-hidden-services/

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Not So Anonymous - Deanonymization of Blockchain Users

  • 1. Not so Anonymous - Deanonymization of Blockchain Users Johannes Ahlmann Cork Blockchain Meetup 2018-11-13 https://www.dailydot.com/news/anonymous-opfullerton-kelly-thomas/
  • 2. Lightning Talk - Agenda • Is Bitcoin anonymous? • What is Deanonymization? • Why should I care? • What can I do about it? • Where to get cryptos? • Alternatives
  • 3. Anonymity & Privacy Anonymity "They" can see what you do, but not who you are Privacy Controlling who sees what activities you engage in https://d262ilb51hltx0.cloudfront.net/max/1610/1*d0KdwdeKDi5m8n-sZdr-_A.png
  • 4. Anonymity 1/2 • Pseudonymity - People are aware of one or multiple pseudonyms of yours, but not your true identity • Anonymity = Pseudonymity + Unlinkability • Unlinkability • Different actions of the same user should not be linkable to each other • Linking of addresses to users • Linking of transactions to users • Linking of senders to recipients source: Prof. Murtuza Jadliwala
  • 5. Anonymity 2/2 • Privacy vs. Decentralization • Public Ledger is core component in consensus and sharing state of the world • Bitcoin is pseudonymous, not anonymous • public addresses = pseudonyms • much less anonymous, private than cash • Many Bitcoins are acquired through Exchanges or Mining Pools • Relatively few merchants/ market participants to trade with
  • 6. What is Deanonymization • Linking you to your addresses • Linking you to your transactions • Tagging, clustering of totality of addresses, transactions • Approaches • Transaction Graph Analysis • Realtime Network Analysis of P2P network
  • 7. Transaction Graph Analysis 1/2 Change Address Combined Addresses
  • 8. Transaction Graph Analysis 2/2 • Bitcoin transactions are public • Active collecting • Mining pools • Online wallets • Exchanges • Merchants • Gambling • Tagging clusters • One tagged address in cluster tags all cluster • Bitcoin address should only be used once An Analysis of Anonymity in the Bitcoin System F. Reid and M. Harrigan, PASSAT 2011
  • 9. Realtime Network Analysis • "Attack" on the P2P Network • Peers distinguished over set of its (8) entry nodes • Linking inputs • Tagging clusters
  • 11. Realtime Network Analysis • Linking of different transactions to same user • Each peer is trying to connect to 8 entry nodes • Network discovery • Servers • Receive incoming connections • Max. 117 incoming connections • Clients • 8 outgoing connections • Peers are distinguished over set of it’s entry nodes!
  • 12. Remediation • Hierarchical Deterministic Wallets • Random Address Pool Wallets • Tor • Mixers • Who can we trust? • Coinjoin • How to find Peers? • Anonymous cryptocurrencies
  • 13. Anonymous Currencies Monero - Ring signatures Dash - Fork of bitcoin, coin-mixing service Zcash - zk-SNARK, zero knowledge proofs Verge - Tor and I2P network for privacy Komodo - Fork of Zcash, zk-SNARK Pivx - Fork of Dash, Zerocoin protocol (Legitimate goods vs. legitimate worries; how can this be used for good or bad?)
  • 15. Resources • https://coincenter.org/entry/how-anonymous-is-bitcoin • https://bitcoinmagazine.com/articles/is-bitcoin-anonymous-a-complete-beginner-s-guide-1447875283/ • https://www.coursera.org/lecture/cryptocurrency/how-to-de-anonymize-bitcoin-qnS76 • https://www.slideshare.net/bhaslhofer/bitcoin-deanonymization-and-money-laundering-detection-strategies • https://pwlconf.org/2018/giulia-fanti/ • https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/ • https://decentralize.today/a-new-attack-vector-to-deanonymize-bitcoin-users-9c6dc433d4b6 • https://www.deepdotweb.com/2017/04/20/how-companies-are-deanonymizing-bitcoin/ • https://www.slideshare.net/bhaslhofer/bitcoin-deanonymization-and-money-laundering-detection-strategies • https://bitcoinsandblockchains.blogspot.com/2016/05/bitcoin-deanonymization.html • https://btcmanager.com/u-s-department-of-homeland-security-create-bitcoin-deanonymization-tool/ • https://www.deepdotweb.com/2018/01/02/using-bitcoin-transaction-analysis-deanonymizing-users-tor-hidden-services/