A Mixing Scheme Using a Decentralized Signature Protocol for Privacy Protection in Bitcoin Blockchain

Abstract

Bitcoin transactions are not truly anonymous as an attacker can attempt to reveal a user's private information by tracing related transactions. Existing approaches to protect privacy (e.g., mixcoin, shuffle, and blinded token) suffer from a number of limitations. For example, some approaches assume the existence of a trusted third party, rely on exchanges among various currencies, or broadcast sensitive details before mixing. Therefore, there is a real risk of privacy breach or losing tokens. Thus in this paper, we design a mixing scheme with one decentralized signature protocol, which does not rely on a third party or require a transaction fee. Specifically, our scheme uses a negotiation process to guarantee transaction details, which is monitored by the participants. Furthermore, the scheme includes a signature protocol based on the ElGamal signature protocol and secret sharing. The proposed scheme is then proven secure.