DASH - Reading Assignment

[ol_frank]

1. What information does PrivateSend conceal, and by what method?
   Similar to CoinJoin PrivateSend keeps hidden the senders receivers and amount.

2. How do masternodes improve on the initial CoinJoin proposal?
   Masternodes incentivise token holders of at least 1000 Dash tokens and enable services such as InstantSend and PrivateSend among others. PrivateSend executes CoinJoin in an effort to implement security and privacy. Essentially this adds a non-custodial layer on CoinJoin. (i think).

3. Alice send some DASH to Bob using PrivateSend. Describe how an attacker could link their addresses.
   PrivateSend should be safe, however there is a possibility that the a masternode could be a bad actor and therefore able to link the information of sender and receiver and amount.

4. In what way could PrivateSend be more risky than a normal Bitcoin Transaction?
   Masternodes could effectively be compromised or a masternode could be malicious in its intent. Therefore risk would be higher in this possible scenario.

[Toddness]

1. What information does PrivateSend conceal, and by what method? Your wallet address is concealed as your inputs are CoinJoined with 2 other people’s inputs into a new “change” address.

2. How do masternodes improve on the initial CoinJoin proposal? They act as a second layer but voting on then “locking” the inputs of the transactions being verified, then broadcasting this so no double spends can occur as these transactions are added to the next block.

3. Alice send some DASH to Bob using PrivateSend. Describe how an attacker could link their addresses. By looking at Masternode network data for commonality and linking Bob and Alice.

4. In what way could PrivateSend be more risky than a normal Bitcoin Transaction? The masternode data could be used to glean data given it is not as decentalized as Bitcoin.

[HemalT]

1. What information does PrivateSend conceal, and by what method?
   PrivateSend gives you consumer grade financial privacy by shuffling your Dash with other users. All the Dash in your wallet consists of different inputs, which you can think of as separate, discrete coins. It uses an innovative process to join your inputs with the inputs of at least two other people in a single transaction. You retain control of your money at all times.
2. How do masternodes improve on the initial CoinJoin proposal?
   The MasterNode accepts the proposal, receives the coins from the interested parties, mixes them together and sends them to the newly generated addresses. The process can be automatically repeated up to 8 times and it involves three parties at a time.
3. Alice send some DASH to Bob using PrivateSend. Describe how an attacker could link their addresses.
   Many masternodes run under a private network, so if an attacker gets access to that private network, he can get access to a considerable amount of masternodes and spy their activity. It’s also possible to run a masternode and spy its activity and link the sender and receiver addresses used in PrivateSend transactions.
4. In what way could PrivateSend be more risky than a normal Bitcoin Transaction?
   Many masternodes are controlled by the same entity, and it is not easy to know who operates them. Risk of hacking or data breaches.

[Samuel1]

1. PrivateSend conceals your financial information using CoinJoin.
2. The masternodes use CoinJoin to make your coins even more anonymous.
   3.The attacker can use the masternodes to obtain the sending and receiving addresses together, so the more people using CoinJoin will make the attack more difficult.
   4.If you have access to Masternodes you can make the system centralized and susceptible to privacy loss.

[maxs]

1. What information does PrivateSend conceal, and by what method?
   PrivateSend conceals the source of funding to external observers.
2. How do masternodes improve on the initial CoinJoin proposal?
   By coordinating the mixing of coins.
3. Alice send some DASH to Bob using PrivateSend. Describe how an attacker could link their addresses.
   By having access to the masternode data.
4. In what way could PrivateSend be more risky than a normal Bitcoin Transaction?
   Asking for more privacy may sound more interesting to attackers, so if they have access to the masternodes, that’s a risk.

[Kahoobb]

1. What information does PrivateSend conceal, and by what method?

PrivateSend conceals information in regards to where your funds originated from. This is done by mixing your transaction inputs with two other people’s after the inputs have been broken up into denominations e.g.(0.001, 0.01, 0.1, 1 and 10 DASH) like paper money. The mixing may apply 1-16 times and the more times it is applied, the more difficult it becomes for any third-party to reveal the identities behind those transactions.

2. How do masternodes improve on the initial CoinJoin proposal?

They construct the transactions and provide anonymity via mixing with only two other participants. This way anonymity can be achieved via mixing without having to add transactions from more than two other participants which can lead to failures such as retry.

3. Alice send some DASH to Bob using PrivateSend. Describe how an attacker could link their addresses.

Considering mixing of transactions would generate a new ‘change address’ each time in which they would pay to…the attacker can still reverse-engineer the original sender and receiver of a transaction by querying the blockchain.

4. In what way could PrivateSend be more risky than a normal Bitcoin Transaction?

A master node could act maliciously on the network to compromise the anonymity of its users.

[Denzel]

1.- The ownership history of the coins thanks to the “coin-mixing” method.

2.- Masternodes collect coins from different users and execute the coin mixing function.

3.- Only if the attacker runs a masternode, they could have the power to link their addresses.

4.- You dont know who is running a master node.

[walter_w]

the link for PrivateSend should be updated in the lesson: https://docs.dash.org/en/stable/wallets/electrum/advanced.html#privatesend

1. the amount that is being sent, by breaking it up into predetermined chunk sizes
2. by collecting the transactions to perform the mix
3. masternodes would have the info to link the addresses
4. masternodes are a target for attacks

[ryan9632]

I found the following link much more useful for answering the questions.
https://docs.dash.org/en/stable/wallets/dashcore/coinjoin-instantsend.html

1. What information does PrivateSend conceal, and by what method?
   It conceals the identity of the sender by using CoinJoin to shuffle their funds with other users, then only using UTXOs which are sufficiently shuffled.
2. How do masternodes improve on the initial CoinJoin proposal?
   It’s improved by being done automatically, users just have to click 1 or 2 buttons. They don’t have to find other peers and construct a special transaction. And coins can be shuffled up to 16 times automatically.
3. Alice send some DASH to Bob using PrivateSend. Describe how an attacker could link their addresses.
   If Bob used a specific address for Alice, like if he generated an invoice for her, then it would be obvious that the sender of funds was Alice even if she tried to hide her identity with PrivateSend.
4. In what way could PrivateSend be more risky than a normal Bitcoin Transaction?
   If you use PrivateSend it might make you look suspicious and actually make you a target for spying. Also PrivateSend splits up payments into smaller parts which could make the user more vulnerable to some linking attacks.

[Alko89]

@ryan9632

If Bob used a specific address for Alice, like if he generated an invoice for her, then it would be obvious that the sender of funds was Alice even if she tried to hide her identity with PrivateSend.

Using private send wouldn’t really make this obvious on the blockchain. An attacker could link the tx before it is being mixed by the masternode.

@ryan9632

If you use PrivateSend it might make you look suspicious and actually make you a target for spying. Also PrivateSend splits up payments into smaller parts which could make the user more vulnerable to some linking attacks.

One can run a malicious masternode that links addresses before they are mixed.

[StuartZW]

The link between inputs and outputs of a tx, it is an implementation of Coinjoin.

Masternodes collect and mix the TX from multiple parties

Spying Nodes

[Meddodreddo]

1. What information does PrivateSend conceal, and by what method?
   Uses CoinJoin type method.

2. How do masternodes improve on the initial CoinJoin proposal?
   Master does first await 2 other participants before transforming the inputs and resending it to the holders wallet new wallet address. Many iterations of the is possible. It’s coordinated by the masternode.

3. Alice send some DASH to Bob using PrivateSend. Describe how an attacker could link their addresses.
   Transaction amount, although standardized, is the same in the end. Larger anonymity set but still a possibility. Also time, since the unconfirmed transactions are locked by the master nodes, they occur very very soon after the transaction is initiated to when received.

4. In what way could PrivateSend be more risky than a normal Bitcoin Transaction?
   Masternode. Anyone can set one up or sniff one where the details of the transactions to be mixed can be spied upon.

[Fjell]

1. The information that PrivateSend conceals is any link between the inputs and outputs of a transaction. It uses an innovative process to join your inputs with the inputs of at least two other people in a single transaction, giving you consumer grade financial privacy by shuffling your Dash with other users. The value in Dash never leaves your wallet however. so you retain control of your money at all times.
2. Masternodes improve on the initial CoinJoin proposal in the following ways: when two other people send similar messages, indicating that they wish to join coins of the same denomination, a session begins. The masternode instructs all three users’ wallets to pay the now-transformed inputs to themselves. Your wallet pays that denomination directly to itself but in a different address (called a change address). Your wallet can repeat this process a number of times with each denomination, and your funds will pass through at least the number of rounds you specify.
3. An attacker could link their addresses only by hacking or running the Masternode themselves.
4. PrivateSend could be more risky than normal a Bitcoin transaction if Masternodes are run by malicious actors, e.g. government departments, financial regulators, tax auditors, criminals, etc.

[tony1999]

1. Both the Sender and Receiver. It works as an implementation of coinjoin.
2. No one needs to construct the transaction. Masternodes work by collecting and mixing the coins. It is completely automatic.
3. If the masternode is compromised, or if the person running the masternode is the attacker.
4. See Q.3.

[Timbalasian]

PrivateSend conceals the coin’s input and output information through the method of Coin Mixing.

MasterNodes “mixes” the input and outputs of the coins prior to the wallet sending the coins. This process makes it tracing of the owners of the coins virtually impossible and hence ore private.

Computer programs might still be sophisticated enough that breaks down the mixing.

Master Nodes must stay trustless. Otherwise, the fungibility would be the same as Bitcoin.

[dazzles]

1. It conceals the sender of the transaction by mixing the transaction three ways that is made by a master node

2. A master node makes it easier for different users to pool together

3. By hacking the masternode

4.you have to trust the mastenode

[ineffable]

1. It conceals the trail of ownership of the coins mixed together.
2. Not requiring someone to construct the Coinjoin transaction, masternodes collect and mix the coins.
3. Matching amount and time of tx or hacking masternode
4. You have to trust the individual or entity running the masternode

[jgentry]

1. PrivateSend conceals important personal information through masternodes, an innovative feature that powers CoinJoin and InstantSend, among other cryptocurrency systems.

2. Masternodes improve on the initial CoinJoin proposal in that it gives CoinJoin users better financial privacy. No attackers would be able to see the person’s name, public key, private key, hash, or other information.

3. Alice sends some DASH to Bob using PrivateSend. An attacker could link their addresses together only if the transaction can be reversed.

4. PrivateSend could actually be more risky than a normal bitcoin transaction because a person who uses PrivateSend can risk double spending.

[FreeBird81]

1. PrivateSend conceals the ownership of the coins. CoinJoin gives financial privacy by the masternodes.

2. Masternodes improves the process by making it simpler.

3. The mixing masternodes can link the address together by knowing the input and output.

4. When you use PrivateSend it is already suspicious and just hope that the masternode has not been corrupted.

[makinitnow]

1. PrivateSend conceals the information about the sender by CoinJoin method. The inputs & outputs can later be no more linked as the coins have been previously mixed.

2. Masternodes impove on the initial CoinJoin as they are special servers that run & mantain a two tier network. They collect & mix the coins. So nobody needs to construct the transaction.
   Masternodes are used to power CoinJoin, InstantSend, and the governance and treasury system. Users are rewarded for running masternodes; 45% of the block reward is allocated to pay the masternode network. Masternode users are also given voting rights on proposals.

3. Their addresses could be linked if you have automatic backups disabled. Consequently, users who have backups disabled will also have CoinJoin disabled. Or in a case where the system is exploited & somene spys on the data.

4. PrivateSend could be riskier than a normal Bitcoin tx if the CoinJoin method is exploited by malicious third parties that collect or expose users data.