T-Mix: A Threshold Cryptography Mixing Service for Bitcoin

Bitcoin is the first successful implementation of the blockchain, which eliminates the role of trusted centralized settlement entities. Although Bitcoin was designed with anonymity in mind, it has recently faced privacy challenges as some users’ identities have been revealed (Biryukov and Khovratovich 2014; Fleder et al. 2015; Maesa et al. 2016, 2017) To address this issue, mixing services are used in Bitcoin to increase user anonymity. Mixcoin provides a centralized mixing service that reduces the impact of blockchain transaction analysis by hiding the links among transaction addresses to preserve users’ anonymity. However, Mixcoin has shortcomings against active attacks in which the attacker can compromise mixing service and inject fraudulent transaction addresses to steal funds. Mixcoin has an integrity issue in that the mixing service enabled dishonest behavior. This paper proposes T-Mix, a protocol that addresses Mixcoin’s shortcomings by enhancing its availability and integrity using threshold cryptography. We present Mixcoin’s threat model followed by a description of T-Mix.