Zcash Privacy Weakened by Certain Behaviors, Researchers Say

Researchers have identified patterns in certain kinds of zcash transactions that weaken their anonymity, according to a paper published Tuesday.

George Kappos, Haaroon Yousaf, Mary Maller and Sarah Meiklejohn found that when coins move from “unshielded” to “shielded” and back to “unshielded” addresses, they lose much of the anonymity that zcash users expect. The University College London team wrote that their “relatively simple heuristics … reduce the size of the overall anonymity set by 69.1 percent.”

Zcash, one of the most prominent and well-regarded privacy coins, offers two kinds of addresses: “t-addresses” are transparent or unshielded, meaning that their balances and transactions are publicly visible on the blockchain; “z-addresses” are shielded, meaning that their balances and transactions are invisible.

Transactions from one unshielded address to another are completely public, if pseudonymous, as in bitcoin. Transactions from one shielded address to another are almost completely invisible, showing only the timestamps and fees associated with mining.

Transactions between different types of addresses introduce complications, however, making it possible to glean some information about the z-addresses involved, according to the paper.

Part of the reason is behavioral, the authors explain. “Our heuristics would have been significantly less effective if the founders interacting with the pool behaved in a less regular fashion,” they write. “In particular, by always withdrawing the same amount in the same time intervals, it became possible to distinguish founders withdrawing funds from other users.” […]

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