20 Jul '12, 4pm

Secure multiparty Bitcoin anonymization

Secure multiparty Bitcoin anonymization

As with traditional mixing, a number of precautions should be taken in order to avoid accidentally revealing information about the source of Bitcoins via a side-channel. Consider the case where Alice has 2 BTC tied to her real-world identity, and she would like to anonymously pay 3/4 BTC to Bob. Alice first prepare by creating a pool of empty wallets, which she will use to carry the anonymized Bitcoins. Alice connects to a tracker for 1 BTC mixing over Tor. (1 BTC is the amount she would like to pay to Bob, rounded up.) She waits a time window to expire for the next mixing, and then as the protocol takes place submits her (public) input wallet and her (anonymous) output wallet. If the protocol fails, she throws out her output wallet and submits a new one next time, and blacklists the misbehaving node if she can figure out who it is. Once Alice has successfully carried out ...

Full article: http://blog.ezyang.com/2012/07/secure-multiparty-bitcoin-...

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