chris-belcher

I keep a diary of all the work I do on bitcoin privacy.

It may also be interesting to my collaborators and donors, and anyone who wants to follow
how my projects are going (these days I'm almost exclusively working on developing
CoinSwap, see https://gist.github.com/chris-belcher/9144bd57a91c194e332fb5ca371d0964).

(Note: I use the datetime format YYYY-MM-DD)

= week-2020-11-30 =
working on initial sync of core wallet including coinswap addresses, not just the xpubs

chris-belcher

Design for a CoinSwap Implementation for Massively Improving Bitcoin Privacy and Fungibility

25/5/2020

Abstract

Imagine a future where a user Alice has bitcoins and wants to send them with maximal privacy, so she creates a special kind of transaction. For anyone looking at the blockchain her transaction appears completely normal with her coins seemingly going from address A to address B. But in reality her coins end up in address Z which is entirely unconnected to either A or B.

Now imagine another user, Carol, who isn't too bothered by privacy and sends her bitcoin using a regular wallet which exists today. But because Carol's transaction looks exactly the same as Alice's, anybody analyzing the blockchain must now deal with the possibility that Carol's transaction actually sent her coins to a totally unconnected address. So Carol's privacy is improved even though she didn't change her behaviour, and perhaps had never even heard of this software.

chris-belcher

list of links for quick copypasting when debating on forums, also useful as a reading list

this was posted on reddit, link is https://www.reddit.com/r/Bitcoin/comments/7mh8c2/long_live_decentralized_bitcoin_a_reading_list/

some of these links may be subject to linkrot, try looking on archive.org or archive.is

Summary / The fundamental tradeoff

a trip to the moon requires a rocket with multiple stages by gmaxwell https://www.reddit.com/r/Bitcoin/comments/438hx0/a_trip_to_the_moon_requires_a_rocket_with/

chris-belcher

Edit 14/09/2016

JoinMarket release 0.2.0 ameliorates this snooping attack. It is a protocol-breaking change so everyone must update which we anticipate may take some time.

https://github.com/JoinMarket-Org/joinmarket/blob/master/doc/release-notes-0.2.0.md

Edit2

Looks like enough people have updated and there's plenty of liquidity now.

chris-belcher

The Problem

JoinMarket has a problem where it assumes different nicknames have different bitcoin wallets. This can be exploited by people running multiple yield generator bots from the same wallet, so they get a higher rate of profit at the expense of de-legitimizing the system for privacy.

Crypto primitive 1: Merkle Tree

A merkle tree is a way of producing a commitment to a set, which can later can prove that elements are contained within the set using only O(logN) data, and only revealing one other element in the set.

For example here is a merkle tree commiting to a set of numbers {6, 3, 9, 0, 8, 4, 7, 2}

chris-belcher

https://www.reddit.com/r/Bitcoin/comments/cgryi1/international_energy_agencys_report_on_bitcoin/

78% of bitcoin mining uses renewables https://twitter.com/C_Bendiksen/status/1068221424777814016 apparently because of their cheaper marginal cost

debunking of the nature paper https://twitter.com/nic__carter/status/1056976815032582144

https://twitter.com/Beetcoin/status/935460412262375424

https://hackernoon.com/the-reports-of-bitcoin-environmental-damage-are-garbage-5a93d32c2d7 reddit thread: https://www.reddit.com/r/Bitcoin/comments/almsef/the_reports_of_bitcoin_environmental_damage_are/

chris-belcher

Design for improving JoinMarket's resistance to sybil attacks using fidelity bonds

13/7/2019

tl;dr

JoinMarket can be sybil attacked today at relatively low cost which can destroy its privacy. Bitcoins can be sacrificed with burner outputs and time-locked addresses (also called fidelity bonds), and this can be used to greatly improve JoinMarket's resistance to sybil attacks.

With real-world data and realistic assumptions we calculate that under such a fidelity bond system an adversary would need to lock up 30,000-80,000 bitcoins for months, or send 45-120 bitcoins to burner addresses to have a good chance of sybil attacking the system if it were added to JoinMarket.

chris-belcher

Financial mathematics of JoinMarket fidelity bonds

13/7/2019

To read the context see the main document Design for improving joinmarket's resistance to sybil attacks using fidelity bonds.

Valuing fidelity bonds

We want to come up with a mathematical formula which gives the value of a fidelity bond. We want this function to be in the best interests of takers who use it. We aim for them to get the best possible sybil resistance.

chris-belcher

How Wasabi Wallet and Samourai-Wallet-Whirlpool slightly degrade the divisibility of bitcoin

December 2018

I made this claim on twitter recently and many people wanted me to go into more detail.

Lots of privacy tech in bitcoin like coinjoin, coinswap, tumblebit and Lightning Network require many entities to come together to agree to make certain kinds of transactions. This creates a requirement that the right resources (coins) have to be in the right place,

chris-belcher

JoinMarket with off-chain fees

17/01/2019

Problem: Single JoinMarket coinjoins aren't private enough

A single JoinMarket coinjoin often doesn't hide which inputs belong to the maker(s) and which belong to the taker. This is because the coinjoin fee is included on-chain.

To tell apart takers' inputs from makers' inputs, subset matching can be used. The taker's subset is