Users’ anonymity can decrease by up to 60%, according to the researchers. Linking addresses to the Ethereum Name Service can reduce anonymity.
Cryptocurrency and blockchain expert Seres András recently published on his Twitter account a report that reveals how the privacy of users during Ethereum transactions could be violated.
András notes that people’s financial activity is detectable by linking wallet addresses to the Ethereum Name Service (ENS) or Twitter accounts. In this way, András and a team of collaborators used data from Etherscan and ENS domains to gather information on the activity of some addresses, including temporary activity, the price of the gas used, and the descriptors of transaction graphs.
Various collaborators, including the Hungarian Institute for Computer, Science, and Control, prepared the report. Two universities from Hungary and the Canadian company HashCloack Inc. also participated in the study.
The analysis starts with the idea that privacy is lower in account-based cryptocurrencies than in UTXO-based currencies. A UTXO is an unspent or unused transaction output. In that sense, Bitcoin is one of the platforms that UTXO uses for its transactions.
Therefore, by analyzing the temporary activity of the user @Kinchasa5000, the team was able to identify his time zone with relative ease. According to András, they managed to get the profile of thousands of Ethereum addresses based on their transactions.
Likewise, by using new node integration algorithms, and time of day representations, they were able to link multiple addresses of the same user. They also managed to link addresses with ENS names to verify the information as true.
Privacy Destruction on Ethereum
The report adds that the creation of profiles is highly efficient when seeking to partially remove anonymity from a person on the Ethereum network. Besides, it explained that a node embedding process makes it possible to reduce the anonymity of a user on the network by between 50% and 60%.
On his Twitter account, András said that this was probably just a lower limit. He said that their results would be improved by future research that considers additional identifiers and wallet fingerprints (or PIN).
He added that Ether wallets show the price of gas in Gwei, so a transaction hardly changes the last 9 digits of an account balance. Such knowledge allows a person to acquire the fingerprints of the balances of possible victims, by sending transactions with a strange ending in the last 9 digits. This attack can be detrimental to privacy, once transactions reach the Ethereum network.
The work done was only applied to chain data. In this respect, András states that those entities that have more resources can use data from the network for such a task, thus destroying privacy on the Ethereum network layer.
Zcash alliance said that they plan to offer private transactions for Bitcoin, Cosmos, and Ethereum. The number of armored transactions conducted through the platform of Zcash increased by 258% from January to May 4th. These types of transactions offer users a high level of privacy.
By Willmen Blanco
