TumbleBit: an untrusted Bitcoin-compatible anonymous payment hub

This paper presents TumbleBit, a new unidirectional unlinkable payment hub that is fully compatible with today s Bitcoin protocol. TumbleBit allows parties to make fast, anonymous, off-blockchain payments through an untrusted intermediary called the Tumbler. TumbleBits anonymity properties are similar to classic Chaumian eCash: no one, not even the Tumbler, can link a payment from its payer to its payee. Every payment made via TumbleBit is backed by bitcoins, and comes with a guarantee that Tumbler can neither violate anonymity, nor steal bitcoins, nor print money by issuing payments to itself. We prove the security of TumbleBit using the real/ideal world paradigm and the random oracle model. Security follows from the standard RSA assumption and ECDSA unforgeability. We implement TumbleBit, mix payments from 800 users and show that TumbleBits offblockchain payments can complete in seconds.https://eprint.iacr.org/2016/575.pdfPublished versio

Characteristics of Bitcoin Transactions on Cryptomarkets

Cryptomarkets (or darknet markets) are commercial hidden-service websites that operate on The Onion Router (Tor) anonymity network. Cryptomarkets accept primarily bitcoin as payment since bitcoin is pseudonymous. Understanding bitcoin transaction patterns in cryptomarkets is important for analyzing vulnerabilities of privacy protection models in cryptocurrecies. It is also important for law enforcement to track illicit online crime activities in cryptomarkets. In this paper, we discover interesting characteristics of bitcoin transaction patterns in cryptomarkets. The results demonstrate that the privacy protection mechanism in cryptomarkets and bitcoin is vulnerable. Adversaries can easily gain valuable information for analyzing trading activities in cryptomarkets

Design for trust an exploration of the challenges and opportunities of Bitcoin users

Bitcoin is a cryptocurrency which has received increasing interest over the last five years. Built upon a decentralized peer to peer system, it supports transparent, fast, cost effective, and irreversible transactions, without the need for trusting third party financial institutions. We know however little about people’s motivation and experience with bitcoin currency. This paper reports on interviews with 20 bitcoin users about their experience and their trust challenges. Findings show that bitcoins are used more as commodities for speculative investment or savings’ protection. The paper advances the HCI theories on trust by identifying main bitcoin characteristics and their impact on trust, such as decentralization, unregulation, embedded expertise, and reputation, as well as transactions’ transparency, low cost, and easiness to complete. We also discuss the issue of insecure transactions and the associated risks, in particular the one of dishonest traders and its mitigating strategies. The paper concludes with three design implications including support for the transparency of two-way transactions, tools for materializing trust, and tools for supporting reversible transactions

Dynamics of Dark Web Financial Marketplaces: An Exploratory Study of Underground Fraud and Scam Business

The number of Dark Web financial marketplaces where Dark Web users and sellers actively trade illegal goods and services anonymously has been growing exponentially in recent years. The Dark Web has expanded illegal activities via selling various illicit products, from hacked credit cards to stolen crypto accounts. This study aims to delineate the characteristics of the Dark Web financial market and its scams. Data were derived from leading Dark Web financial websites, including Hidden Wiki, Onion List, and Dark Web Wiki, using Dark Web search engines. The study combines statistical analysis with thematic analysis of Dark Web content. Offering promotions and customer services with the payment methods of cryptocurrencies were prevalent, similar to the Surface Web\u27s e-commerce market. The findings suggest that the Dark Web financial market is likely to harbor scams targeting Dark Web buyers. Dark Web sellers construct a website to sell scam products and recommend purchasing Escrow services to ensure safe transactions as an additional scam. The results from this study provided empirical support for the components of the routine activity theory of the Dark Web financial market to substantiate a more comprehensive view of patterns of fraud/ scams. Enhancing law enforcement capabilities of investigating financial marketplaces and promoting public awareness and consumer safety programs are discussed as effective preventive measures

BlockTag: Design and applications of a tagging system for blockchain analysis

Annotating blockchains with auxiliary data is useful for many applications. For example, e-crime investigations of illegal Tor hidden services, such as Silk Road, often involve linking Bitcoin addresses, from which money is sent or received, to user accounts and related online activities. We present BlockTag, an open-source tagging system for blockchains that facilitates such tasks. We describe BlockTag's design and present three analyses that illustrate its capabilities in the context of privacy research and law enforcement