The Bitcoin transaction graph anonymity

110 Pages·2013·1.96 MB·English

by  Santamaria Ortega, Marc

Universitat Oberta de Catalunya
Universitat Aut(cid:242)noma de Barcelona
Universitat Rovira i Virgili
Universitat de les Illes Balears
Master Program in Security of Information and Communication Technologies
MarcSantamaria Ortega
The Bitcoin Transaction Graph
Anonimity
Master’s Thesis
Barcelona, June 14, 2013
Supervisor: PhDStudentCristinaPØrez-Sol(cid:224),UniversitatAut(cid:242)nomadeBarcelona
Acknowledgements
I would like to express my sincere gratitude to my advisor PhD Student
Cristina PØrez-Sol(cid:224) for her continuous support and her ideas.
Also, I would like to thank my parents and my girlfriend for their motivation
and patience, specially these last weeks.
Barcelona, June 14, 2013
MarcSantamaria Ortega
ii
Universitat Oberta de Catalunya
Universitat Aut(cid:242)noma de Barcelona ABSTRACT OF
Universitat Rovira i Virgili MASTER’S THESIS
Universitat de les Illes Balears
Master Program in Security of Information and Communication Technologies
Author: MarcSantamaria Ortega
Title of thesis: The Bitcoin Transaction Graph - Anonimity
Date: June 14, 2013 Pages: 10 + 56
Professorship: Security in Networks and Systems
Supervisor: PhD Student Cristina PØrez-Sol(cid:224) (UAB)
Bitcoin is a decentralized digital currency based on the use of strong
cryptography and an open-source, peer-to-peer internet protocol to op-
erate. The original Bitcoin software was developed by Satoshi Nakamoto
(a pseudonym) in 2008 [9]. This thesis looks into the de(cid:28)nition of the
protocol, taking special interest in how transactions work, in order to
determine the anonymity of Bitcoin transactions. Previous works explor-
ing anonymity of Bitcoin will be studied. A major goal of this work is
to analyse the anonymity of the Bitcoin network to establish the neces-
sary background for de(cid:28)ning address aggregation methods and study the
correlation of di(cid:27)erent addresses that belong to a user. The di(cid:27)erent ag-
gregation methods which will be speci(cid:28)ed based in the analysis of some
suppositions will be also developed and compared to determine the best
mechanism to unite entities. An implementation of the di(cid:27)erent aggre-
gation methods will be shown as well as some reports which o(cid:27)er a daily
analysis of the anonymization methods and services used in transactions
of the Bitcoin network.
Keywords: Bitcoin, Bitcoin Transaction Graph, BTG, anonimity
aggregation, correlation
Language: English
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Contents
1 Introduction 1
1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Important Concepts and Design Motivations of Bitcoin . . . . . 2
1.3 Why anonymity? . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 Contribution of the thesis . . . . . . . . . . . . . . . . . . . . . 6
1.7 Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2 Bitcoin Description 8
2.1 Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Bitcoin transactions . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Bitcoin transaction graph (BTG) . . . . . . . . . . . . . . . . . 12
3 Anonimity Analysis 15
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 Previous works . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.2.1 An Analysis of Anonymity in the Bitcoin System . . . . 16
3.2.2 Black Ops of TCP/IP 2011 . . . . . . . . . . . . . . . . 19
3.2.3 StructureandAnonymityoftheBitcoinTransactionGraph 20
3.2.4 Zerocoin: Anonymous Distributed E-Cash from Bitcoin . 22
3.3 Anonymity in the Bitcoin Network . . . . . . . . . . . . . . . . 24
4 Aggregation of addresses 27
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2 Suppositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.2.1 Linking of inputs . . . . . . . . . . . . . . . . . . . . . . 28
4.2.2 Linking of outputs . . . . . . . . . . . . . . . . . . . . . 28
4.2.3 Linking of IPs . . . . . . . . . . . . . . . . . . . . . . . . 29
iv
4.2.4 Linking of periodic transactions . . . . . . . . . . . . . . 30
4.2.5 Linking of mixing/laundry services . . . . . . . . . . . . 30
4.3 Study of aggregation methods . . . . . . . . . . . . . . . . . . . 31
4.3.1 Aggregation Method 1 - Linking of inputs . . . . . . . . 31
4.3.2 Aggregation Method 2 - Linking of outputs . . . . . . . . 36
4.3.3 Aggregation Method 3 - Linking of IPs . . . . . . . . . . 40
4.3.4 Aggregation Method 4 - Linking of periodic transactions 42
4.4 Anonymity comparison between aggregation methods . . . . . . 43
4.5 Study of anonymity of users . . . . . . . . . . . . . . . . . . . . 43
4.6 Analysis temporal correlations . . . . . . . . . . . . . . . . . . . 45
5 Future Work 49
6 Summary and Conclusions 51
References 54
A Implementations I
A.1 Aggregation Method 1 . . . . . . . . . . . . . . . . . . . . . . . I
A.2 Aggregation Method 1 . . . . . . . . . . . . . . . . . . . . . . . XI
A.3 Anonymizing methods . . . . . . . . . . . . . . . . . . . . . . X. XII
A.4 Downloading transactions of the last day . . . . . . . . . . . . X. XV
A.5 Temporal correlations . . . . . . . . . . . . . . . . . . . . . . .X.XXI
A.6 Anonymity of users . . . . . . . . . . . . . . . . . . . . . . .X.X.XVI
B Bitcoin Visualizer XLIV
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List of Tables
2.1 Format of Bitcoin transactions . . . . . . . . . . . . . . . . . . . 10
2.2 Format of Bitcoin blocks . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Fields of table tx . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.4 Fields of table txin . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5 Fields of table txout . . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 Fields of table pubkey . . . . . . . . . . . . . . . . . . . . . . . 14
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List of Figures
2.1 Relational diagram of the Bitcoin Database. . . . . . . . . . . . 12
4.1 Ocurrences of transactions who have between 3 and 15 inputs. . 32
4.2 Ocurrences of transactions who have between 16 and 80 inputs. 33
4.3 Ocurrences of transactions who have between 81 and 1813 inputs. 33
4.4 Ocurrences of entities who have between 2 and 41 addresses. . . 35
4.5 Ocurrences of entities who have between 42 and 53428 addresses. 36
4.6 Ocurrences of transactions who have between 3 and 15 inputs. . 37
4.7 Ocurrences of transactions who have between 16 and 80 inputs. 39
4.8 Ocurrences of transactions who have between 81 and 1813 inputs. 40
4.9 Ocurrences of entities who have between 2 and 19 addresses. . . 41
4.10 Ocurrences of transactions who have between 20 and 1434 inputs. 42
4.11 Evolution of all transactions, transactions with several inputs
and transactions with two outputs between 2009-01 and 2011-04. 46
4.12 Evolution of all transactions, transactions with several inputs
and transactions with two outputs between 2011-04 and 2012-04. 46
4.13 Evolution of all transactions, transactions with several inputs
and transactions with two outputs between 2012-04 and 2013-03. 47
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List of Algorithms
4.1 Pseudocode for aggregation method 1 - Linking of inputs . . . . 34
4.2 Pseudocode for aggregation method 2 - Linking of outputs . . . 38
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Symbols and Abbreviations
BTG Bitcoin Transaction Graph
BTC Bitcoin (usually used when referring to the currency)
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Chapter 1
Introduction
1.1 General
Digital currencies have experienced a boom in the last years. Among them
Bitcoin, the (cid:28)rst cryptocurrency, has stood out more strongly and is the most
widespread. Its money supply its estimated nowadays at around $1 billion
USD.
A cryptocurrency consists on a digital currency that relies on cryptography,
usually on a proof-of-work scheme, in order to create and handle the currency.
Bitcoin is a decentralized digital currency based on the use of strong cryp-
tography and an open-source, peer-to-peer internet protocol to operate. The
original Bitcoin software was developed by Satoshi Nakamoto (a pseudonym)
in 2008 [9].
Bitcoindoesnothaveacentralbank; itonlyreliesonaninternet-basedpeer-to-
peernetwork. Transactionsaremadethroughwebsitesandappscalledwallets,
and digital signatures are used to process and verify them. It is designed
to have no in(cid:29)ation and periodically the number of new bitcoins created is
decreased by half, till the year 2140 when a total number of 21 million bitcoins
will have been achieved and no more bitcoins will be created.