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Some of the emerging methods for the de-naming of cryptocurrency users derive from network traffic mapping to unveil IP addresses and create connections between identities. Privacy concerns related to network-level tracking by government surveillance programs and other ways to disclose identities on the Internet have led to several important developments to preserve privacy.
The Tor Network and The Invisible Internet Project (I2P) are two of the leading overlay networks for users to protect their privacy on the public Internet. Other solutions include Mixnets, which are routing protocols that use concatenated proxy servers to combine input messages.
Regarding cryptocurrencies, several privacy-oriented projects and Bitcoin updates explicitly focus on improving network-level protections.
Recent revelations in network attacks
The blockchain forensic methods to identify users focus mainly on the level of the transaction flow analysis protocol of a cryptocurrency. For example, Bitcoin is pseudonym, which means that it is not actually anonymous and that links can be created between user addresses (public keys) and transaction inputs / outputs.
Most of the technologies of anonymity integrated with cryptocurrencies today (ie, zk-SNARKS, bulletproofs and Ring CT) focus on the obfuscation of transaction details on public networks to dissociate any possibility of linking transactions to a & # 39; identity at the protocol level. The RingCTs in Monero and zk-SNARKs in ZCash provide a fundamental mitigation against third parties that deidonize users, but they are also much more cumbersome than standard cryptographic transactions because they require tests that are applied to each transaction.
Read: What are the signatures of the rings?
However, both Monero and ZCash have recently integrated vital efficiency improvements for these confidential transactions, with the recent bulletproof implementation of Monero and Sapling in ZCash.
While a significant effort has focused on protocol-level protections, publications that map IP addresses by detecting transaction sources and subsequently connections with identities (through public keys) have amplified concerns that solutions at the level of protocol are not the only necessary means to safeguard privacy.
When transactions in a public blockchain network – such as Bitcoin – are transmitted by a node that uses the P2P network of TCP connections, they use a gossip protocol (diffusion in Bitcoin) where the propagated transaction reaches the majority of nodes very quickly. The researchers have shown that using supernodes connected to all the nodes of the network, we can infer probabilistic on the origin of the IP broadcast of the transaction.
Successfully reducing the ability to establish connections between IP addresses and public keys requires changing the network stack to provide better protection against observers of transaction charts. In Bitcoin, Dandelion ++ is the network-level anonymity protection proposal that was anchored for inclusion in the protocol in 2019.
Read: What is the Dandelion protocol?
However, Dandelion ++ is not the only solution available and other projects are working to implement their own solutions.
Overlay and Mixnet projects
Overlay Networks
Both Tor and I2P are overlay networks focused on anonymity and voluntary. They do not offer perfect privacy, since privacy is an ever-changing battle, but making users able to decrypt users through network traffic mapping is much more challenging. I2P and Tor have existed for years and use end-to-end encryption to send data packets via voluntary node relays, masking the origin and destination of communication.
Tor uses what is called "onion routing" (Tor stands for "The Onion Router") in which each relay in the network is randomly selected and propagates the message to the next node without knowing the source or destination. Therefore, third parties attempting to use a peering relay do not know the source or end IP address of the message.
Some of Tor's drawbacks are that when you use Tor, it's easy to know that you're using Tor, and the US government – along with the previously mentioned Bitcoin academic document – have shown attacks that can disrupt Tor functionality for target users. . Interestingly, Tor comes from the US Naval Research Laboratory and has been further enhanced by DARPA to protect intelligence communications in the 1990s.
I2P works similarly to Tor but uses "garlic routing" rather than onion routing. Garlic routing is a shortcut for onion routing and aggregates encrypted messages together. I2P is used in a variety of services, including programs that use BitTorrent.
Kovri – Monero's IeroP C2 implementation – is Monero's network-level solution to provide better privacy protection for users. However, recent events concerning its development and the mention of Sekreta as a possible alternative have left Kovri's fate unclear at this point. It is worth mentioning that most of Kovri's first implementation was completed after years of research and development.
Sekreta consists of a "universal" API along with a set of libraries and socket-based application servers designed to improve the shortcomings of other overlapping network projects. Created to be more user-friendly, Sekreta also aims to be more robust in the case of compromised underlying systems than Tor or I2P.
Mixnets
Mixnets are another network-level privacy solution that uses concatenated proxy servers that contain specific inputs (messages), mix them up and send them back to their destination in random order. This is another method for mitigating peering through end-to-end communication and each message is encrypted using public-key cryptography.
Mixnets were proposed by the pioneer of cryptography David Chaum in 1981, but they stayed behind in favor of overlay networks like Tor and I2P over the years. However, they are making a comeback, with the Nym project supported by Binance a prominent example.
Nym is an anonymous authentication protocol for non-detachable and publicly verifiable credentials, which can be considered an anonymous replacement for access to Google and Facebook. Nym uses the Sphinx package format with a Mixnet to obfuscate message sources and recipients and even creates fictitious messages to make network traffic modeling more challenging. Interestingly, they are creating a cross-compatible portfolio for the Mimblewimble blockchain protocols, as well as potential integration with other privacy-oriented cryptocurrency wallets.
Nym can also open the port for decentralized VPNs, which remove third parties that monitor VPN services.
Even Bitcoin's Lightning Network (LN) uses Sphinx as a format for its onion routing protocol. Other optimizations proposed for the LN include HORNET – a high-speed onion routing protocol – and offer LN users greater control over their payment network routing through source routing.
BEAM – a full implementation Mimblewimble – recently launched, and Grin – a further open source Mimblewimble implementation – will also be launched in the coming days. The integration of Nym with a new transaction-building protocol like Mimblewimble has the potential to produce robust networks for anonymous value transfers. Grin and BEAM also incorporate Dandelion as a network-level privacy protection.
Read: What is Grin Coin and MimbleWimble?
Mixnet are also subject to their vulnerabilities, however. Because mixers do not perfectly combine input and output, observers can use temporal attacks to create gaps or artificial gusts to analyze patterns of incoming and outgoing messages through mixes.
Take steps forward in privacy
The persistent data scandals that have come to dominate mainstream titles in recent years have left a growing part of the mainstream worried about their privacy. With privacy at a premium level, initiatives to innovate overlay networks, mixnets and cryptographic cryptography have provided a valuable alternative for the anonymous exchange of information and value.
Efforts to subvert privacy are constantly evolving, and it is refreshing to see so many projects with a strong emphasis on combining these adverse efforts. Protocol updates such as zk-SNARKs and bulletproofs present significant breakthroughs in cryptography and their combination with network-level solutions such as mixnets and overlay networks have crucial long-term implications for the broader notion of privacy.
