New Attacks on the Untraceability of Transactions in CryptoNote-Style Blockchains

CryptoNote is a privacy-focused blockchain protocol. Currently, more than 10 different cryptocurrencies including Monero, a popular cryptocurrency with a 1-year average market cap of 2 billion USD, have been developed based on the CryptoNote’s protocol. CryptoNote obscures the connection between inputs and outputs of a transaction by adding decoy inputs. In this paper, we introduce probabilistic attacks to the untraceability of CryptoNote which substantially degrades the level of privacy of CryptoNote-style blockchains. We analyze the effectiveness of the proposed attacks and derive their error rates.