Someone May Be Deanonymizing Your Bitcoin Transactions

NEW YORK (InsideBitcoins) – One week ago, a thread popped up on bitcointalk that questioned whether someone may be attempting to surveil the bitcoin network by way of a large number of nodes that were owned by the same entity. User Evil-Knieval noted that ‘it is obvious that one person seems to be running hundreds of bitcoin nodes which aggressively try to connect to everyone.’ Bitcoin core developer Greg Maxwell popped in on the thread and requested information related to the ‘naughty peers’ while they were connected to Knieval’s node. After Knieval reported back to Maxwell, the bitcoin wizard admitted that ‘this is moderately concerning.’
A sybil attack on the bitcoin network
Maxwell explained, ‘What it looks like to me is a rather ham-fisted sybil attack trying to trick nodes into leaking private data to them.’ He then went on to note that the possible attack could cause issues for certain bitcoin wallets. It’s possible that this unusual node activity could be related to issues that Breadwallet users were dealing with recently. Maxwell also noted that bitcoin does have a ‘degree of resistance’ against sybil attacks, but the reason that these sorts of attacks usually fail is because attackers are required to obtain 100% of a victim node’s connections during more sinister activities. Since this potential sybil attack is about leaking private data, the attacker does not need to worry about gaining every last one of a victim’s connections.

This post was published at Inside Bitcoins on Mar 13, 2015.