Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Virtual money: User’s identity can be revealed much easier than thought

25.11.2014

Bitcoin is the new money: minted and exchanged on the Internet. Faster and cheaper than a bank, the service is attracting attention from all over the world. But a big question remains: are the transactions really anonymous?

Several research groups worldwide have shown that it is possible to find out which transactions belong together, even if the client uses different pseudonyms. However it was not clear if it is also possible to reveal the IP address behind each transaction. This has changed: researchers at the University of Luxembourg have now demonstrated how this is feasible with only a few computers and about €1500.

“It’s hard to predict the future, but some people think that Bitcoin could do to finance what the Internet did to communications”, says Prof. Alex Biryukov, who leads digital currency research at the University. “So I think especially for Luxembourg it is important to watch what happens with Bitcoin”.

The Bitcoin system is not managed by a central authority, but relies on a peer-to-peer network on the Internet. Anyone can join the network as a user or provide computing capacity to process the transactions. In the network, the user’s identity is hidden behind a cryptographic pseudonym, which can be changed as often as is wanted. Transactions are signed with this pseudonym and broadcast to the public network to verify their authenticity and attribute the Bitcoins to the new owner.

In their new study, researchers at the Laboratory of Algorithmics, Cryptology and Security of the University of Luxembourg have shown that Bitcoin does not protect user’s IP address and that it can be linked to the user’s transactions in real-time. To find this out, a hacker would need only a few computers and about €1500 per month for server and traffic costs. Moreover, the popular anonymization network “Tor” can do little to guarantee Bitcoin user’s anonymity, since it can be blocked easily.

The basic idea behind these findings is that Bitcoin entry nodes, to which the user’s computer connects in order to make a transaction, form a unique identifier for the duration of user’s session. This unique pattern can be linked to a user’s IP address. Moreover, transactions made during one session, even those made via unrelated pseudonyms, can be linked together. With this method, hackers can reveal up to 60 percent of the IP addresses behind the transactions made over the Bitcoin network.

“This Bitcoin network analysis combined with previous research on transaction flows shows that the level of anonymity in the Bitcoin network is quite low”, explains Dr. Alex Biryukov. In the paper recently presented at the ACM Conference on Computer and Communications Security the team also described how to prevent such an attack on user’s privacy. Software patches written by the researchers are currently under discussion with the Bitcoin core developers.

The University of Luxembourg, founded in 2003, is a multilingual, international research university with 6200 students and staff from all over the globe. Its research focuses on computational sciences, law and especially European law, finance, educational sciences as well as interdisciplinary research conducted by the Interdisciplinary Centre for Security, Reliability and Trust (SnT) and the Luxembourg Centre for Systems Biomedicine (LCSB).

Notes to editor

The full scientific article “Deanonymisation of clients in Bitcoin P2P network” as published in the Proceedings of the ACM Conference on Computer and Communications Security can be viewed here: http://orbilu.uni.lu/handle/10993/18679 . DOI: 10.1145/2660267.2660379 


Weitere Informationen:

http://orbilu.uni.lu/handle/10993/18679  - Full scientific article: “Deanonymisation of clients in Bitcoin P2P network”
http://wwwen.uni.lu/recherche/fstc/laboratory_of_algorithmics_cryptology_and_security_lacs  - Laboratory of Algorithmics, Cryptology and Security (LACS) at the University of Luxembourg

Sophie Kolb | idw - Informationsdienst Wissenschaft

More articles from Information Technology:

nachricht Terahertz spectroscopy goes nano
20.10.2017 | Brown University

nachricht New software speeds origami structure designs
12.10.2017 | Georgia Institute of Technology

All articles from Information Technology >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Salmonella as a tumour medication

HZI researchers developed a bacterial strain that can be used in cancer therapy

Salmonellae are dangerous pathogens that enter the body via contaminated food and can cause severe infections. But these bacteria are also known to target...

Im Focus: Neutron star merger directly observed for the first time

University of Maryland researchers contribute to historic detection of gravitational waves and light created by event

On August 17, 2017, at 12:41:04 UTC, scientists made the first direct observation of a merger between two neutron stars--the dense, collapsed cores that remain...

Im Focus: Breaking: the first light from two neutron stars merging

Seven new papers describe the first-ever detection of light from a gravitational wave source. The event, caused by two neutron stars colliding and merging together, was dubbed GW170817 because it sent ripples through space-time that reached Earth on 2017 August 17. Around the world, hundreds of excited astronomers mobilized quickly and were able to observe the event using numerous telescopes, providing a wealth of new data.

Previous detections of gravitational waves have all involved the merger of two black holes, a feat that won the 2017 Nobel Prize in Physics earlier this month....

Im Focus: Smart sensors for efficient processes

Material defects in end products can quickly result in failures in many areas of industry, and have a massive impact on the safe use of their products. This is why, in the field of quality assurance, intelligent, nondestructive sensor systems play a key role. They allow testing components and parts in a rapid and cost-efficient manner without destroying the actual product or changing its surface. Experts from the Fraunhofer IZFP in Saarbrücken will be presenting two exhibits at the Blechexpo in Stuttgart from 7–10 November 2017 that allow fast, reliable, and automated characterization of materials and detection of defects (Hall 5, Booth 5306).

When quality testing uses time-consuming destructive test methods, it can result in enormous costs due to damaging or destroying the products. And given that...

Im Focus: Cold molecules on collision course

Using a new cooling technique MPQ scientists succeed at observing collisions in a dense beam of cold and slow dipolar molecules.

How do chemical reactions proceed at extremely low temperatures? The answer requires the investigation of molecular samples that are cold, dense, and slow at...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

3rd Symposium on Driving Simulation

23.10.2017 | Event News

ASEAN Member States discuss the future role of renewable energy

17.10.2017 | Event News

World Health Summit 2017: International experts set the course for the future of Global Health

10.10.2017 | Event News

 
Latest News

Microfluidics probe 'cholesterol' of the oil industry

23.10.2017 | Life Sciences

Gamma rays will reach beyond the limits of light

23.10.2017 | Physics and Astronomy

The end of pneumonia? New vaccine offers hope

23.10.2017 | Health and Medicine

VideoLinks
B2B-VideoLinks
More VideoLinks >>>