Coinjoin And Sharecoin Do Not Provide Anonymity For Bitcoin Transactions

[Millard]

Security expert Kristov Atlas issued a security warning last summer saying that CoinJoin implementations (like Blockchain's SharedCoin) are not anonymous.

Blockchain's CEO Nicolas Cary confirmed it was true - ShareCoin only provides enhanced privacy but does not guarantee anonymity.

If you require true anonymous transactions, use another service.

Consultant Kristov Atlas, author of the book Anonymous Bitcoin, published a security advisory today saying weaknesses in SharedCoin offered privacy only from "unskilled examiners of the bitcoin blockchain" – and even then, only until more sophisticated analysis tools were made user-friendly enough for the average user to deploy.

Source: http://www.coindesk.com/blockchains-sharedcoin-users-can-identified-says-security-expert/

SharedCoin and other services implementing the CoinJoin protocol enhance the privacy of users transactions by allowing them to construct shared transactions that prevent a casual observer from tracing all account activity on the public ledger with minimal effort. They do not prevent a determined investigator from correlating transactions or an adversary with information about specific addresses from correlating them to specific payments and payees.

If you want to truly hide transactions, SharedCoin and other implementations of CoinJoin are not for you – they are neither sufficient nor convenient. SharedCoin provides a basic level of enhanced privacy transaction but doesn’t guarantee anonymity nor was it intended to.

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To be clear, SharedCoin is not a mixing service, in that it does not control any funds or receive or send any funds on behalf of users. SharedCoin is a service that allows users to find others and to collaborate for the purpose of constructing shared transactions among themselves. At no time does SharedCoin control the funds or direct the funds. The SharedCoin service is thus an automated bulletin board that users who want to join transactions voluntarily use to find each other.

SharedCoin does not provide anonymity or untraceability. An interested party with sufficient motivation and computing power can correlate the inputs and outputs of a shared transaction using statistical analysis. That means that, given enough time and money, most SharedCoin transactions can be analyzed to identify, with a high statistical probability, the correlation between spenders and payees. SharedCoin is not meant to provide untraceable or anonymous bitcoin transactions; it is designed to offer basic privacy protection against casual analysis for legitimate use.

Source: https://blog.blockchain.com/2014/06...oinjoin-implementations-uses-and-limitations/

 

[Millard]

Here is the full-text of Kristov Atlas Security Advisory < 20140609-0 >:

http://www.coinjoinsudoku.com/advisory/

The website also includes a tool for analyzing SharedCoin and other CoinJoin-based mixing protocols.