Deanonymization in the Bitcoin P2P Network
Recent attacks on Bitcoin's peer to peer (P2P) network demonstrated that its transaction flooding protocols, which are used to ensure network consistency, may enable user deanonymization the linkage of a user's IP address with her pseudonym in the Bitcoin network. In 2015, the Bitcoin community responded to these attacks by changing the network's flooding mechanism to a different protocol, known as diffusion. However, it is unclear if diffusion actually improves the system's anonymity. In this paper, we model the Bitcoin networking stack and analyze its anonymity properties, both pre and post 2015. The core problem is one of epidemic source inference over graphs, where the observational model and spreading mechanisms are informed by Bitcoin's implementation; notably, these models have not been studied in the epidemic source detection literature before. We identify and analyze near optimal source estimators. This analysis suggests that Bitcoin's networking protocols (both pre and post 2015) offer poor anonymity properties on networks with a regular tree topology. We confirm this claim in simulation on a 2015 snapshot of the real Bitcoin P2P network topology.
NIPS