Comparison of Common Blockchain Privacy Solutions

Author: Chris Slane

Table of Contents

Deterministic Wallets

  1. 10 BTC in address A
  2. and 5 BTC in address B,
  3. but needs to send 13 BTC,
  1. 10 BTC from address A,
  2. 3 BTC from address B,
  3. and 2 BTC as change to a new address C (which is again deterministically created).
✓✓: Supports privacy | ✓: Support privacy to some degree | ✘: Does not support privacy

Pros

  • Protects the sender or receiver address.

Cons

  • Public keys created by deterministic wallets can be linked if enough data is present.

Stealth Addresses

✓✓: Supports privacy | ✓: Support privacy to some degree | ✘: Does not support privacy

Pros

  • Protects the receiver address.
  • Unlike deterministic wallets, the receiver can publish a single address to receive payments.
  • 3rd parties can not know who the receiver is.

Cons

  • The sender can track which address he/she sent to and see how the what is done with the payment.

CoinJoin

How CoinJoin works
✓✓: Supports privacy | ✓: Support privacy to some degree | ✘: Does not support privacy

Pros

  • Protects sender address, helps to obfuscate payment amount.

Cons

  • Sender addresses can be linked if enough data is present. It’s harder to link than deterministic wallets.
  • There needs to be a CoinJoin server which will know whose coins are joined. If a single party owns enough CoinJoin servers, they might be able to map the transactions accurately.
  • Others should be online and available to mix transactions.

Ring Signature Mixers

✓✓: Supports privacy | ✓: Support privacy to some degree | ✘: Does not support privacy

Pros

  • Protects sender address, helps to obfuscate payment amount
  • Unlike CoinJoin, doesn’t need anyone to be online. Mixing can be done locally.

Ring Confidential Transactions

f(a)+f(b)=f(a+b)

✓✓: Supports privacy | ✓: Support privacy to some degree | ✘: Does not support privacy

Pros

  • Hides the payment amount.

Cons

  • Uses range proofs which is a slow cryptographic algorithm.

Zero-Knowledge Proof

✓✓: Supports privacy | ✓: Support privacy to some degree | ✘: Does not support privacy

Pros

  • Protects the sender address, receiver address, payment amount and contract payload.

Cons

  • Uses range proofs, thus has similar computational overhead as Ring CT.

State Channels

✓✓: Supports privacy | ✓: Support privacy to some degree | ✘: Does not support privacy

Pros

  • Can protect sender address, receiver address, payment amount and total transaction count.

Cons

  • The nodes need to be online.
  • Information is published when a channel is closed or an actor broadcasts.

Hiding IPs

Solutions in Private Blockchains

Private Transactions

Channels

Conclusion

✓✓: Supports privacy | ✓: Support privacy to some degree | ✘: Does not support privacy

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Co-founder of usehaystack.io

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Kan Yilmaz

Kan Yilmaz

Co-founder of usehaystack.io

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