The webpage uses the Blotzmann tool for calculating the degree of privacy of transactions. Users can visualize their transactions and choose one randomly
One of the most valued characteristics of cryptocurrencies is their privacy, since it allows users to make transactions without the need of providing a third party with their personal information. However, the degree of privacy of a transaction within a Blockchain cannot be determined with certainty. A web portal allows Bitcoin users to calculate the level of privacy of their transactions.
The name of the web portal is Know Your Coin Privacy (KYCP), a game of words that ironically refers to governmental KYC (Know Your Customer) rules, which demand users’ personal identification on financial platforms. The webpage works as an explorer, where users can enter their own transactions or choose random transactions within the Bitcoin network in order to prove their degree of privacy.
The identification of a transaction, also known as TXID, is enough for the portal to calculate its metrics of privacy, notifying the levels of entropy of a transaction, its linking ratio, and the amount of deterministic links and the efficiency of the said transaction. According to details on the portal, all of these data are based on the tool of analysis, Blotzmann, which was developed by LaurentMT for Samourai Wallet and is used by the explorer for make calculations in a few seconds.
The explorer has been tested on a transaction made from an on-line wallet on the platform LocalBitcoins. Once the identification of the transaction is entered into the browser, the portal calculates its degree of privacy. It is surprising that the transaction has little entropy, two deterministic links, and a low percentage of efficiency. All these data indicate that the transaction is not as private as it seems, maybe due to the intermediation of the platform.
The webpage also allows visualizing these data through a simulator, suggesting a total of 16 random transactions made from different wallets and Exchange houses. For that reason, even those people that have not made transactions within the network can verify the degree of privacy of certain transactions in comparison with others.
It is important to emphasize that wallet addresses within the Bitcoin network can be tracked by Blockchain analysts, such as has occurred with companies and governmental entities. The transactions within a Blockchain have a sending address, information that can be used for learning information about users, provided that they have linked such information with a particular exchange house or website that has served as an intermediary in the accounting history of a particular cryptocurrency or series of transactions. Due to this, some specialists recommend that the transaction have more than one possibility of interpretation (greater entropy), since in this way it is harder to determine from which computer a specific number of Bitcoins have been sent.
In a context where the community demands a higher degree of privacy, new cryptocurrencies, such as Monero, Zcash and Dash, are created with the aim to offer more private transactions. Likewise, some Bitcoin wallets have been developed to improve the privacy of transactions within the network day after day.
Bitcoin developers have also been discussing the possibility to introduce tools that improve the degree of privacy of transactions, being this one of the most famous denial proposals. Lightning Network also improves Bitcoin privacy, conducting several projects on light specialized tools and clients within this sector, such as in the case of the initiatives Daemon and CoinJoinXT.
By Willmen Blanco