13/7/2019
4/4/2021 (edited fixing formula and adding two graphs)
7/5/2021 (added appendix 1)
To read the context see the main document Design for improving joinmarket's resistance to sybil attacks using fidelity bonds.
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.
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}
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).
Support this work with a donation: https://bitcoinprivacy.me/coinswap-donations
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
Looks like enough people have updated and there's plenty of liquidity now.
25/5/2020
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.
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
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/
13/7/2019
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.
| #jsonrpc.py from https://github.com/JoinMarket-Org/joinmarket/blob/master/joinmarket/jsonrpc.py | |
| #copyright # Copyright (C) 2013,2015 by Daniel Kraft <d@domob.eu> and phelix / blockchained.com | |
| import base64 | |
| import httplib | |
| import json | |
| class JsonRpcError(Exception): | |
| def __init__(self, obj): | |
| self.message = obj |
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,