Researchers claim that 99.9% of Zcash’s transactions are traceable

 

Researchers at Carnegie Mellon University have published a study on the privacy features of Monero (XMR) and Zcash (ZEC), possibly the two most popular cryptoactives intended to provide anonymity to users.

The report finds that Monero’s introduction of strict security and anonymity requirements into its extended ecosystem has maintained the asset’s status as „effectively untraceable.

Across the board, the report concludes that the lack of implementation of Zcash’s privacy capabilities by more than 99% of users compromises the privacy of the network as a whole despite the fact that ZEC offers „strong cryptographic features.

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Zcash users‘ behavior compromises privacy

The report describes Zcash as a

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) that seeks to „completely break the link between sender and receiver.

The researchers claim that „Zcash is not widely used“ at present, citing a May 2020 survey of Darknet markets that indicates that „[Zcash] is not the preferred cryptomone currency on the dark web.

Through the use of succinct, non-interactive zero-knowledge arguments, or SNARKs, ZEC is able to avoid any interaction between the transaction tester and the verifier, creating „a barrier that further impedes efforts to link directions.

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However, Zcash offers both protected anonymous transactions and transparent pseudonyms, researchers found that only 0.09% of ZEC transactions fully utilized the privacy features of the protocol over a 30-day period.

„[Although] cryptographically Zcash is very well founded, users behave in a way that does not take full advantage of the protected set, making them traceable. As each user in the protected group is linked to the transparent group, the overall anonymity of the ZEC ecosystem is reduced as the anonymity set is drastically reduced“.

„It appears that the vast majority of Zcash users still do not understand the operating model of Zcash,“ the study found, concluding that the „tiny“ group of SAC users using armored transactions makes Zcash „effectively traceable.

It was found that 30% of XMR transactions are traceable

The report notes that an increasing number of altcoins have tried to mark themselves as privacy currencies, claiming that they offer completely private transactions in contrast to the pseudonymous transactions enabled by almost all cryptoactives.

The researchers observed many features of Monero designed to provide impossible tracking and linking.

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Single-use addresses are used for each transaction output to prevent linkage, while traceability is addressed with single-use ring signatures, a form of zero knowledge testing, along with decoy entries called mixins.

The paper also discusses several additional improvements to the protocol from 2017, and concluded that less than 1% of XMR transactions in the last two years were traceable according to most of the analysis methods used.

However, one model was able to reveal transaction data with 30% accuracy.