An Empirical Analysis of Linkability in the Monero Blockchain

Monero is a privacy-centric cryptocurrency that allows users to obscure their transactions by including chaff coins, called “mixins,” along with the actual coins they spend. In this paper, we empirically evaluate two weaknesses in Monero’s mixin sampling strategy. First, about 62% of transaction inputs with one or more mixins are vulnerable to “chain-reaction” analysis — that is, the real input can be deduced by elimination. Second, Monero mixins are sampled in such a way that they can be easily distinguished from the real coins by their age distribution; in short, the real input is usually the “newest” input. We estimate that this heuristic can be used to guess the real input with 80% accuracy over all transactions with 1 or more mixins. Next, we turn to the Monero ecosystem and study the importance of mining pools and the former anonymous marketplace AlphaBay on the transaction volume. We find that after removing mining pool activity, there remains a large amount of potentially privacy-sensitive transactions that are affected by these weaknesses. We propose and evaluate two countermeasures that can improve the privacy of future transactions. DOI Editor to enter DOI Received ..; revised ..; accepted ... *Corresponding Author: Malte Möser: Princeton University, E-mail: [email protected] Kyle Soska: Carnegie Mellon University, E-mail: [email protected] Ethan Heilman: Boston University, E-mail: [email protected] Kevin Lee: University of Illinois at Urbana-Champaign Henry Heffan: Brookline High School, E-mail: [email protected] Shashvat Srivastava: Massachusetts Academy of Math and Science at WPI, E-mail: [email protected] Kyle Hogan: Massachusetts Institute of Technology, E-mail: [email protected] Jason Hennessey: Boston University, E-mail: [email protected] Andrew Miller: University of Illinois at Urbana-Champaign, E-mail: [email protected] Arvind Narayanan: Princeton University, E-mail: [email protected] Nicolas Christin: Carnegie Mellon University, E-mail: [email protected] (a) Bitcoin