Coin Transfer Unlinkability Under the Counterparty Adversary Model

Abstract

Unlinkability is a crucial property of cryptocurrencies that protects users from deanonymization attacks. However, currently, even anonymous cryptocurrencies do not necessarily attain unlinkability under specific conditions. For example, Mimblewimble, which is considered to attain coin unlinkability using its transaction kernel offset technique, is vulnerable under the assumption that privacy adversaries can send their coins to or receive coins from the challengers. This paper first illustrates the privacy issue in Mimblewimble that could allow two colluded adversaries to merge a person’s two independent chunks of personally identifiable information (PII) into a single PII. To analyze the privacy issue, we formulate unlinkability between two sets of objects and a privacy adversary model in cryptocurrencies called the counterparty adversary model. On these theoretical bases, we define an abstract model of blockchain-based cryptocurrency transaction protocols called the coin transfer system, and unlinkability over it called coin transfer unlinkability (CT-unlinkability). Furthermore, we introduce zero-knowledgeness for the coin transfer systems to propose a method to easily prove the CT-unlinkability of cryptocurrency transaction protocols. Finally, we prove that Zerocash is CT-unlinkable by using our proving method to demonstrate its effectiveness.