A new Bitfury white paper aims to advance the study of how bitcoins sent using certain privacy-enhancing techniques could be traced back to participants.
Released today, “Shared Send Untangling in Bitcoin” explores how bitcoins in this type of transaction can be “untangled”, or sorted into their “original” value flows. Shared send transactions originate when users organize into groups, by way of an intermediary, in order to obfuscate how funds may be moving between wallets.
“We establish a theoretical approach to shared send transaction analysis, which formulates the transaction untangling problem in terms of the graph theory. We also describe several practically important modifications to the untangling problem,” the paper states.
Of note are its implications for CoinJoin and CoinSwap, algorithms created by bitcoin developer Greg Maxwell that mix transactions inputs and outputs, and that were seen as advances in bringing privacy to the open, public blockchain that records bitcoin transactions.
The research is also the latest by Bitfury that demonstrates its willingness to expand beyond bitcoin mining, following a report in July that sought to solve challenges related to the Lightning Network, an in-development bitcoin micropayments platform.