Anonymity-enhancing decentralized protocol for coin mixing based on ring signatures and key derivation

Mixing serves as an effective method to safeguard the privacy of nodes in digital currency systems by introducing a mixer to break the link between transaction inputs and outputs. Existing mixing schemes heavily rely on stringent security assumptions to prevent potential risks, including privacy breaches and coin loss. Recognizing this concern, we propose DcMix, a decentralized private coin mixing scheme that ensures unconditional anonymity for nodes within a peer-to-peer network. To establish a mixing group that offers forward security, we employ the challenge-response model, forming a one-time chat room. This room utilizes a hierarchical key tree structure, generated through a key derivation primitive, wherein distinct branches serve specific purposes. This approach enables nodes in the group to construct their individual key trees, preventing the tracing of mixing records in an open network environment. Additionally, DcMix incorporates a variation of the Abe-Ohkubo-Suzuki (AOS) ring signature to conceal identities from both group nodes and online adversaries. DcMix achieves robust anonymity and transaction unforgeability, effectively countering known message attacks. Experimental results demonstrate that DcMix exhibits a computation overhead approximately 60% lower than CoinParty and CoinLayering with eight mixers. Furthermore, even with a high transaction volume of up to 1,900, DcMix’s computation overhead remains 25% lower than that of the aforementioned schemes.