Mixing Strategies in Cryptocurrencies and An Alternative Implementation
This work tackles the problem of deanonymization in cryptocurrencies for users seeking privacy, but it appears incremental as it builds on existing mixing strategies.
The paper addresses the lack of complete anonymity in cryptocurrencies by reviewing existing schemes and proposing Eth-Tumbler, an alternative implementation that uses layered encryption and multiple signatures to achieve k-anonymity for users.
Since the initial launch of Bitcoin by Satoshi Nakamoto in 2009, decentralized digital currencies have long been of major interest in both the academia and the industry. Till today, there are more than 3000 different cryptocurrencies over the internet. Each one relies on mathematical soundness and cryptographic wit to provide unique properties in addition to securing basic correctness. A common misbelief for cryptocurrencies is that they provide complete anonymity by replacing people's real-life identity with a randomly generated wallet address in payments. However, this "pseudonymity" is easily breakable under the public ledger. Many attacks demonstrate ways to deanonymize people through observing the transaction patterns or network interactions. Thus, cryptocurrency fungibility has become a popular topic in the research community. This report reviews a partial list of existing schemes and describes an alternative implementation, Eth-Tumbler. Eth-Tumbler utilizes layered encryption and multiple signatures and thus efficiently hides a user under k-anonymity.