blockchain & privacy

blockbar                                      @bartroorda                                      2019-01-31

ADDRESS1

sent

1 BTC

to

ADDRESS2 

Bart

has

2788.01 ETH

on his address

goals of this session

• go through best practices
• discuss techniques on the way

on addresses

• don't reuse addresses
   

• be careful with exchanges
  
  
  
  
   

• be careful with fiat gateways

on addresses

privacy coins

privacy coins

opt-in privacy

relies on zksnarks & trusted setup

privacy by default
uses ring confidential signatures

only private transactions
uses zksnarks & Zcash' trusted setup

there are no addresses, amounts are encrypted
uses MimbleWimble which uses CoinJoin

opt-in privacy using PrivateSend

uses CoinJoin, needs trust in MasterNodes

blockchain protocols

blockchain protocols

succinct blockchain enabled by recursive composition of zk-SNARKs

Coda protocol

CoinJoin

Coda protocol

Schnorr Signatures

Zksnarks  

Zkstarks  

put signatures of multiple transactions into 1 sig.

benefit: smaller transactions, therefor scalability

Taproot

makes all transactions look the same:

multisig tx is indistinguishable from normal tx

join transactions together -> create ambiguity about who is paying whom

zero-knowledge proofs in which no interaction is necessary between prover and verifier

transparent zero-knowledge proof system that's interactive without trusted setup

• use decentralized exchanges
  
  
  
  
  
  
  
  
  
  
  
   

• preferably run the software yourself

on exchanges

more on exchanges

The Jumblr protocol makes t- transactions z-transactions

 

- Bitcoin -> ZCash -> Bitcoin

 

- delayed in time

 

- payments done in power of 10s (0.01, 0.1, 1, 10, 100, etc)

examples on dex(change)s

Examples of decentralized exchange protocols:

 

comit.network

 

atomicdex

 

uniswap.io 🦄

on wallets

basics:

- own your own money

- your key, your money. not your keys, not your money

ip address obfuscation:

- use tor

- use a privacy-focussed vpn

 

getting balances & sending transactions:

- run your own node

on wallets

extra anonymity when sending coins:

 

- use a tumbler:

also known as a coin mixer

 

- use tumblebit:

a mixer protocol whereby the mixer itself can't link payer to payee

on wallets

wallets focussed on privacy:

 

- Electrum Wallet

- Samourai Wallet

- Wasabi Wallet

on second layer

Second layer networks like Lightning & Raiden Network work for enhanced anonymity.

 

Payments are aggregated off chain and details are learned only by people directly involved.

 

Still, network analysis can be done, just like in TOR.

 

Expect Lightning/Raiden to function as a Jumblr.

• own your own funds
   
• don't reuse addresses
   
• use privacy coins or protocols
   
• know how your wallet works
   
• if you swap from coin to coin, use a DEX

summary