[bitcoin-dev] BIP proposal - Dandelion: Privacy Preserving Transaction Propagation

Hi all, We're writing with an update on the Dandelion project. As a reminder, Dandelion is a practical, lightweight privacy solution that provides Bitcoin users formal anonymity guarantees. While other privacy solutions aim to protect individual users, Dandelion protects privacy by limiting the capability of adversaries to deanonymize the entire network. Bitcoin's transaction spreading protocol is vulnerable to deanonymization attacks. When a node generates a transaction without Dandelion, it transmits that transaction to its peers with independent, exponential delays. This approach, known as diffusion in academia, allows network adversaries to link transactions to IP addresses. Dandelion prevents this class of attacks by sending transactions over a randomly selected path before diffusion. Transactions travel along this path during the "stem phase" and are then diffused during the "fluff phase" (hence the name Dandelion). We have shown that this routing protocol provides near-optimal anonymity guarantees among schemes that do not introduce additional encryption mechanisms. Since the last time we contacted the list, we have: - Completed additional theoretical analysis and simulations - Built a working prototype (https://github.com/mablem8/bitcoin/tree/dandelion) - Built a test suite for the prototype (https://github.com/mablem8/bitcoin/blob/dandelion/test/ functional/p2p_dandelion.py) - Written detailed documentation for the new implementation (https://github.com/mablem8/bips/blob/master/bip- dandelion/dandelion-reference-documentation.pdf) Among other things, one question we've addressed in our additional analysis is how to route messages during the stem phase. For example, if two Dandelion transactions arrive at a node from different inbound peers, to which Dandelion destination(s) should these transactions be sent? We have found that some choices are much better than others. Consider the case in which each Dandelion transaction is forwarded to a Dandelion destination selected uniformly at random. We have shown that this approach results in a fingerprint attack allowing network-level botnet adversaries to achieve total deanonymization of the P2P network after observing less than ten transactions per node. To avoid this issue, we suggest "per-inbound-edge" routing. Each inbound peer is assigned a particular Dandelion destination. Each Dandelion transaction that arrives via this peer is forwarded to the same Dandelion destination. Per-inbound-edge routing breaks the described attack by blocking an adversary's ability to construct useful fingerprints. This iteration of Dandelion has been tested on our own small network, and we would like to get the implementation in front of a wider audience. An updated BIP document with further details on motivation, specification, compatibility, and implementation is located here: https://github.com/mablem8/bips/blob/master/bip-dandelion.mediawiki We would like to thank the Bitcoin Core developers and Gregory Maxwell in particular for their insightful comments, which helped to inform this implementation and some of the follow-up work we conducted. We would also like to thank the Mimblewimble development community for coining the term "stempool," which we happily adopted for this implementation. All the best, Brad Denby <bdenby at cmu.edu> Andrew Miller <soc1024 at illinois.edu> Giulia Fanti <gfanti at andrew.cmu.edu> Surya Bakshi <sbakshi3 at illinois.edu> Shaileshh Bojja Venkatakrishnan <shaileshh.bv at gmail.com> Pramod Viswanath <pramodv at illinois.edu> -------------- next part -------------- An HTML attachment was scrubbed... URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20180510/218df2ca/attachment.html>