adlai

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Context

This third part is about known and potential attacks against the privacy provided by tools like coinjoin.


Known attacks & weaknesses

- Linkability of inputs and outputs

A good illustration of this attack is Coinjoin Sudoku (see (1) for details).

adlai

Context

In part 1 of this document, we've defined the entropy of a transaction.
This metric is a first good proxy to qualify the degree of privacy provided by a transaction but it fails to detect privacy leaks occuring at lower levels (1).
In this second part, we define 2 complementary fine-grained tools/metrics: the Link Probability of 2 utxos (LP) and the Link Probability Matrix (LPM) of a transaction.


Link Probability of 2 UTXOs

We call Link Probability of a tuple (tx input, tx output) the probability that a link exists between the 2 utxos.

adlai

This document is an attempt to define metrics quantifying the degree of privacy provided by a bitcoin transaction.


Objectives

Definition of metrics measuring the resistance of a transaction to a set of attacks against users privacy.

Attacks considered in the scope of these metrics are:
- Merged Inputs Heuristic: methods identifying the inputs controlled by a same entity
- Coinjoin Sudoku: methods identifying the links existing between the inputs and outputs of a transaction 

adlai

On-chain contracting for privacy

(thanks to @fivepiece for significant contributions to these ideas)

"On chain contracting" is of course a very generic term; it applies to multisignature, coinjoin, coinswap or other exotic transactions that involve more than one party in one transaction (coinjoin, multisig) or multiple transactions (swaps with atomic-via-secret).

Here we're going to focus on a broader model that may allow more complex setups,