A new bitcoin anonymization technology TRR (Transaction Remote Release) inspired by Tor has been revealed by Chinese researchers from the ATR Defense Science & Technology Lab at Shenzhen University.

The technology is said to be able to repulse a number of typical attack strategies, including the Sybil attack, Bitcoin protocol sniffers, as well as fake Bitcoin and TRR nodes attacks.

Anonymization is one of the Bitcoin digital currency’s fields of development which has its opposite in so-called "privacy-as-bug" phenomenon that reflects the current attitude of banks and governments towards cryptotechnology.

Whilst giving its due to the blockchain’s ability to work cheaper and faster than traditional means of money transfer, its orientation towards anonymity and privacy is something that, they believe, should be eliminated. And thus there are emerging blockchain analysis tools such as Bitcoin Big Bang released in June by Elliptic which, aiming at enhanced transparency and preventing money laundering, in fact make bitcoin users vulnerable from the point of view of their privacy.

The new anonymization technology TRR is based on the same method as the one used by Tor, applying layer by layer an encryption-decryption process which makes it impossible to detect sender's IP.

“In the Bitcoin protocol, the only way that the attackers can connect the Bitcoin address with an IP address is in the process of releasing and spreading a new transaction. If we encrypt the new transaction and obfuscate the source IP of the sender then the attackers may not succeed,” reads the original research paper.

The main drawback of the technology is that it requires the original bitcoin protocol to be changed, which is hardly possible when the transparency trend is now becoming more and more widespread.

Still, experts say, it may be used in the sidechain, the technology which is currently developed by Blockstream and explored by the largest bank of Switzerland, UBS.

Maria Rudina