Privacy Analysis and Evaluation Policy of Blockchain-based Anonymous Cryptocurrencies
This work provides a structured framework for evaluating the privacy of anonymous cryptocurrencies, which is crucial for developers and users to understand the actual privacy guarantees of these systems.
This paper proposes a three-layer architectural model for blockchain-based anonymous cryptocurrencies and defines fundamental privacy properties (anonymity, unlinkability, and pseudonymity) within this model. It then establishes a privacy evaluation policy by analyzing these properties across each architectural layer and uses this policy to compare the privacy of leading anonymous cryptocurrencies like Zerocash, CryptoNote, and Mimblewimble.
In blockchain-based anonymous cryptocurrencies, due to their tamper-resistance and transparency characteristics, transaction data are initially required to be anonymous, with the help of various cryptographic techniques, e.g., commitment schemes and zero-knowledge proofs. Also, cryptocurrencies are different from existing anonymous messaging protocols regarding the software architecture and the underlying security model. Due to these differences, the sense of anonymity must be specifically defined for anonymous cryptocurrencies, and the anonymity in each anonymous cryptocurrency must be analyzed and evaluated based on the specific architecture model. In this paper, we first propose a specific architecture model with three software layers to anonymous cryptocurrencies. Next, we introduce definitions of fundamental privacy properties (Pfitzmann's anonymity, unlinkability, and pseudonymity) and comprehensively analyze each privacy property for each architecture layer of anonymous cryptocurrencies to establish a privacy evaluation policy for anonymous cryptocurrencies. Finally, we fairly compare the privacy of current leading anonymous cryptocurrencies (e.g., Zerocash, CryptoNote, and Mimblewimble) using the privacy evaluation policy.