Thanks for all of your feedback!
Interesting reading material... I've quickly browsed trough your attack on coinmixer.se, and my first reaction was that you were able to attack them because they did not include any variation in the creation of their output transactions. I mean, if a mixer only creates output transactions with version = 2, sequence = 294967294, locktime > 0 and the fee is within a very small range, it should become pretty easy to identify those transactions (and you did).
Don't get me wrong, what you did was a very nice thing... I personally wouldn't have the patience to analyse a mixer's method like you did, and i personally feel that you discovered a huge security flaw in coinmixer.se's mode of operation... However, i can hardly imagine it being impossible to fix these issues...
They basically had to generate more "random" output transactions, making sure there isn't a clear pattern in them... If they'd do this, it looks to me like an attack on their service would have been much harder.
That being said: i quickly browsed trough your thesis, so i haven't read your exact conclusions (yet), but i really think you did a great job... Raising awareness about security flaws that have been made even by the biggest mixing services is a good thing for the community
Thanks for the feedback.
Yes, you are correct, it was pretty easy to identify coinmixer.se's network. However, it was the biggest mixing services at the time and it should be seen an example of how to break these services.
The general problem of these mixing algorithms is, that they use generic transactions. Even if every transaction of a centralized mixing service is completely randomized you will be able to differentiate (with a great possibility) generic randomized transactions sent by a mixing service from genuine user transactions.
However, identifying a network does not necessarily imply that transactions of this network can be deanonymized (but in a regulated future you might get some problems trying to use these coins).
Generally speaking, the algorithms of coinmixing services are evolving. While the first generation of mixing services could easily be broken through simple taint analysis (bitcoin fog, blockchain.info mixing service), the next generation of mixing implementation needed some more work to be broken (bitmixer.io - timing attack, coinmixer. se transaction analysis) and with the newest mixing algorithms (chipmixer.com) you might already need heuristic methods.
An important research, but why don't you spend more time on attacking Chipmixer or other mixing services (of course, ideally the biggest ones). I'm curios as how far will you be able to attack reputable mixer services and if you did succesfully hack it up, maybe we need to rework how mixing services is built.
Yes, when I started my research bitmixer.io and after that coinmixer.se were the biggest mixing services. However, I realized that chipmixer.com has a better approach of mixing but was not used that much. Right after my thesis, I began with other bitcoin projects, so I didn't look further into my approaches to attack chipmixer.com. But I see, many people are interested in chipmixer.com. As soon as I got time I will again look into it. I think I already have a little python script.
In general, I would recommend using privacy driven cryptocurrencies if you want to have privacy in your transactions. But if you really want to use Bitcoin, than chipmixer.com might be the best solution for now. But remember, bitmixer.io and coinmixer.io were the best solutions in their times. Today you are able to identify and deanonymize nearly all transactions which have been made through these services. If someone used these services to anonymize their criminal activities they might still get caught.
If this is true, then you can help law enforcement to trace coins that was used in crime. <Some of the bigger exchange hacks that occurred, which used Mixer services to hide the coins>
Did you find any criminal activities and terrorism funding that was presumably done with these Mixer services? Did the 3 letter agencies approach you, like they did with Gavin in the early days, to help them track some of the criminal activities that were done with these services?
Glad to hear that some Mixer services are more secure than others, because we need financial privacy. <The same level as Cash transactions>
Yes, it would be very interesting to check if/how many criminals use these kind of services. I remember, my professor also asked me this question. But I have worked on other projects right after my thesis, so I didnt follow up on this.
Actually I did not publish my thesis till now, because I woked on other cryptocurrency related projects. This is the first place I publish it.
Thanks for sharing. I take a quick look and while you list lots of attack scenario, you forget to mention de-anonymization attack through Tor exit or VPN which leak information such as DNS request (or you intentionally left it as it's complex enough to make separate research)
You might want move this thread to
Development & Technical Discussion as you'll get more people who interested or can give better feedback.
P.S. will add comment after i done read the paper or/and try python code
Thank you!
Yes, I completly forgot network attacks. I remeber, that I thought about it - dont know why I didnt add it.
Thanks for posting, this is very interesting.
Is your conclusion that the specific services have been poorly designed and their implementations are faulty or is an unbreakable mixing service impossible/hard to make?
My conclusion is, that breaking mixing services can be compared to cracking/reverse engineer software. While some years ago it was pretty easy to crack software, in today's world it got way harder. However, in both cases, attackers will always be able to break it.
