Study: “Transactions in Ethereum are easier to deanonymize than in Bitcoin”

Hungarian researchers believe that transactions on the Ethereum blockchain are less confidential than onBitcoin. The reason for this is the Ethereum Domain Name System (ENS).

The study was conducted by three Hungarianeducational institutions: Institute of Computer Science and Control (SZTAKI), Laurent Etvosh University and the University of St. Stephen, as well as the Canadian company HashCloack under the leadership of the developer Ferenc Béres. The researchers analyzed the features of Ethereum, which make it easier to track transactions on this network compared to Bitcoin. The Ethereum account-based model is more open due to address reuse.

“Account-based model increases the likelihoodreuse of addresses at the protocol level. Therefore, from the point of view of anonymity, Ethereum-based cryptocurrencies may be inferior to Bitcoin and other digital currencies based on UTXO ”

The peculiarity of Ethereum lies in the SystemEthereum Domain Name System (ENS), which binds addresses to “.eth” domains, which are easy to read. Researchers were able to find 890 such domains posted on public Twitter profiles. This may already be enough to identify whether the owners of these addresses have committed compromising actions. For example, about 10% of these wallets were used on gambling platforms, and 5% — to make payments on adult resources. According to Beres, ENS has become a “starting point” that allows users to be identified by linking signatures to time zones, as well as through gas prices and direct transfers between wallets. Up to 17% of transactions can be uncovered using these methods.

Researchers also found that 7.5% of users of the ETH Tornado Cash mixer received coins for the same wallet from which they started mixing. This means that the efforts of these users who tried to mix transactions turned out to be futile. Analysts have focused on the weaknesses of Ethereum, but some of the tricks can be applied to UTXO-based cryptocurrencies. However, in this case it will be much more difficult to deanonymize transactions.

Last year, scientists at Stanford Universityintroduced a “fully decentralized and confidential payment mechanism” on the Ethereum network to encrypt account balances, deposits, transfers and withdraw coins from wallets.

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