An Empirical Analysis of Traceability in the Monero Blockchain

TLDR

Monero is a privacy‑centric cryptocurrency that obscures transactions by adding chaff coins (mixins) alongside the real coins. The study empirically evaluates two weaknesses in Monero’s mixin sampling strategy and proposes two countermeasures to enhance future transaction privacy. The authors analyze the impact of mining pools and AlphaBay on transaction volume and evaluate two countermeasures to improve privacy. They find that about 62 % of inputs with mixins are vulnerable to chain‑reaction analysis, that mixins can be distinguished by age with the real input usually being the newest, that this heuristic achieves 80 % accuracy, and that even after excluding mining pool activity, many privacy‑sensitive transactions remain affected.

Abstract

Abstract Monero is a privacy-centric cryptocurrency that allows users to obscure their transactions by including chaff coins, called “mixins,” along with the actual coins they spend. In this paper, we empirically evaluate two weaknesses in Monero’s mixin sampling strategy. First, about 62% of transaction inputs with one or more mixins are vulnerable to “chain-reaction” analysis - that is, the real input can be deduced by elimination. Second, Monero mixins are sampled in such a way that they can be easily distinguished from the real coins by their age distribution; in short, the real input is usually the “newest” input. We estimate that this heuristic can be used to guess the real input with 80% accuracy over all transactions with 1 or more mixins. Next, we turn to the Monero ecosystem and study the importance of mining pools and the former anonymous marketplace AlphaBay on the transaction volume. We find that after removing mining pool activity, there remains a large amount of potentially privacy-sensitive transactions that are affected by these weaknesses. We propose and evaluate two countermeasures that can improve the privacy of future transactions.