A Survey on Privacy Vulnerabilities in Permissionless Blockchains

Aisha Zahid Junejo, Manzoor Ahmed, Abdullah Abdulrehman
2020 International Journal of Advanced Computer Science and Applications  
Blockchain decentralization not only ensures transparency of transactions to eliminate need of trusting third party, but also makes the transactions of the network to be publicly accessible to all the participating peers in the network. As a result, data anonymity and confidentiality are compromised making several business enterprises and industrialists hesitant to adopt the technology. Although research community has proposed various privacy-preserving solutions for blockchain, however, they
more » ... ill lack in efficiency resulting in distrust of industries in opting for the technology. This study is conducted for contributing to the existing body of knowledge corresponding to privacy in blockchains. The fundamental goal of this study is to delve into privacy vulnerabilities of the blockchain network in a permissionless setting by identifying non-trivial roots of factors causing privacy breach in blockchain and presenting limitation of existing privacy preserving mechanisms. Studies with superficial comparison of privacy preserving techniques are available in literature but a detailed and in-depth analysis of their limitations and causes of privacy breach in blockchain is yet not done. Therefore, in this paper we first present comprehensive analysis of various privacy breaching factors of the blockchain networks. Next, we discuss existing cryptographic and noncryptographic solutions in literature. We found out that these existing privacy preserving mechanisms have their own set of limitations and hence are inefficient at current point of time. The existing privacy preserving mechanisms need further consideration of the research community before they're widely adopted and benchmarked. Therefore, in the end, we identified some future directions that need to be addressed to model an efficient privacy preserving mechanism for wider adoption of the blockchain technology. 136 | P a g e www.ijacsa.thesai.org ZKP scenario, the prover is required to answer various challenges sent by verifier, resulting in multiple rounds of communication. However, for blockchains and other distributed ledger technologies (DLT), it is desirable to avoid the communication because either (i) validating nodes can't properly agree on how to choose those challenges, since in many constructions we have to choose them randomly, while the verification algorithm must be deterministic in order to reach consensus; or (ii) because it would make the communication complexity of the system very poor. This property makes it suitable for anonymous and distributed verification of messages in blockchains. The concept first appeared in [54] and is accepted for creating privacy preserving protocols in blockchain networks. NIZK proofs must meet the following three properties:  Completeness: Everything that is true has a proof.  Soundness: Everything that can be proved is true.  Zero knowledge: Only the proven statement is revealed. Zerocoin, introduced in [55] uses NIZK proof cryptography for providing anonymity by preventing transaction graph analysis i.e. by breaking the trace of coins. However, it fails to provide complete anonymity due to following reasons:  Fixed denomination coins are used.  Before payment is made, anonymous coins need to be converted into non-anonymous ones.
doi:10.14569/ijacsa.2020.0110915 fatcat:oczcaq4hh5fdfh4jjk4grgibau