Researchers Claim 99.9% of Zcash Transactions Are Traceable

Sunday 5 May 2020, 5:28 AM AEST - 1 week ago

Researchers from Carnegie Mellon University have released a study into the privacy features of Monero (XMR) and Zcash (ZEC) — arguably the two most-popular crypto assets purporting to offer users anonymity.

The report finds that Moneros introduction of strict security and anonymity requirements on its broader ecosystem has maintained the assets status as effectively untraceable.

Transversely, the report concludes that the lack of utilization of Zcashs privacy capabilities on the part of more than 99% of users undermines the privacy of the overall network despite ZEC offering strong cryptographic features.

Zcash user behavior undermines privacy

The report describes Zcash as a Bitcoin (BTC) fork that seeks to completely break the link between the sender and the receiver.

The researchers assert that Zcash is not widely used currently, citing a May 2020 survey of darknet markets indicating that it [, Zcash,] is by far not the preferred cryptocurrency on the dark web.

Through employing zero-knowledge succinct non-interactive arguments of knowledge, or SNARKs, ZEC is able to prevent any interaction between transaction prover and verifier — creating a barrier that further impedes efforts to link addresses together.

However, Zcash offers both anonymous shielded and pseudonymous transparent transactions, with the researchers finding that only 0.09% of ZEC transactions within a 30-day period made full use of the protocols privacy features.

[E]ven though cryptographically Zcash is very well-founded, the users behave in a way that does not take full advantage of the shielded pool, making them traceable. As each user in the shielded pool becomes linked to the transparent pool, the overall anonymity of the ZEC ecosystem reduces as the anonymity set shrinks drastically.

[I]t seems that the large majority of Zcash users do not yet understand Zcashs operating model, the study finds, concluding that the minuscule set of ZEC users utilizing shielded transactions renders Zcash effectively traceable.

30% of XMR Transactions Found to be Traceable

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