A Mixing Scheme Using a Decentralized Signature Protocol for Privacy Protection in Bitcoin Blockchain

Bitcoin transactions are not truly anonymous as an attacker can attempt to reveal a user's private information by tracing related transactions. Existing approaches to protect privacy (e.g., mixcoin, shuffle, and blinded token) suffer from a number of limitations. For example, some approaches assume the existence of a trusted third party, rely on exchanges among various currencies, or broadcast sensitive details before mixing. Therefore, there is a real risk of privacy breach or losing tokens. Thus in this paper, we design a mixing scheme with one decentralized signature protocol, which does not rely on a third party or require a transaction fee. Specifically, our scheme uses a negotiation process to guarantee transaction details, which is monitored by the participants. Furthermore, the scheme includes a signature protocol based on the ElGamal signature protocol and secret sharing. The proposed scheme is then proven secure.

Automated summary

Bitcoin transactions are not truly anonymous, and existing privacy protection methods have limitations. In this paper, a mixing scheme is designed using encryption technology to secure transaction details without relying on a third party or requiring transaction fees, enhancing the security of privacy protection.