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1. Efficient Off-Chain Transaction to Avoid Inaccessible Coins in Cryptocurrencies

   https://doi.org/10.1109/TrustCom50675.2020.00260  

   Rezaeighaleh, Hossein; Zou, Cliff C. (December 2020, 2020 IEEE 19th International Conference on Trust, Security and Privacy in Computing and Communications (TrustCom))

   null (Ed.)

   Bitcoin and other altcoin cryptocurrencies use the Elliptic-Curve cryptography to control the ownership of coins. A user has one or more private keys to sign a transaction and send coins to others. The user locks her private keys with a password and stores them on a piece of software or a hardware wallet to protect them. A challenge in cryptocurrencies is losing access to private keys by its user, resulting in inaccessible coins. These coins are assigned to addresses which access to their private keys is impossible. Today, about 20 percent of all possible bitcoins are inaccessible and lost forever. A promising solution is the off-chain recovery transaction that aggregates all available coins to send them to an address when the private key is not accessible. Unfortunately, this recovery transaction must be regenerated after all sends and receives, and it is time-consuming to generate on hardware wallets. In this paper, we propose a new mechanism called lean recovery transaction to tackle this problem. We make a change in wallet key management to generate the recovery transaction as less frequently as possible. In our design, the wallet generates a lean recovery transaction only when needed and provides better performance, especially for micropayment. We evaluate the regular recovery transaction on two real hardware wallets and implement our proposed mechanism on a hardware wallet. We achieve a %40 percentage of less processing time for generating payment transactions with few numbers of inputs. The performance difference becomes even more significant, with a larger number of inputs. 

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2. How to Squeeze a Crowd: Reducing Bandwidth in Mixing Cryptocurrencies

   https://doi.org/10.1109/EuroSPW.2018.00012  

   Chator, Alishah; Green, Matthew (April 2018, 2018 IEEE European Symposium on Security and Privacy Workshops (EuroS&PW))

   Several popular cryptocurrencies incorporate privacy features that "mix" real transactions with cover traffic in order to obfuscate the public transaction graph. The underlying protocols, which include CryptoNote and Monero's RingCT, work by first identifying a real transaction output (TXO), sampling a number of cover outputs, and transmitting the entire resulting set to verifiers, along with a zero knowledge (or WI) proof that hides the identity of the real transaction. Unfortunately, many of these schemes suffer from a practical limitation: the description of the combined input set grows linearly with size of the anonymity set. In this work we propose a simple technique for efficiently sampling cover traffic from a finite (and public) set of known values, while deriving a compact description of the resulting transaction set. This technique, which is based on programmable hash functions, allows us to dramatically reduce transaction bandwidth when large cover sets are used.We refer to our construction as a recoverable sampling scheme, and note that it may be of independent interest for other privacy applications. We present formal security definitions; prove our constructions secure; and show how these constructions can be integrated with various currencies and different cover sampling distributions. 

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3. SPRITE: Secure and Private Routing in Payment Channel Networks

   Panwar, Gaurav; Vishwanathan, Roopa; Torres, George; Misra Satyajayant (July 2024, ACM Asia Conference on Computer and Communications Security (ACM AsiaCCS))

   Payment channel networks are a promising solution to the scalability challenge of blockchains and are designed for significantly increased transaction throughput compared to the layer one blockchain. Since payment channel networks are essentially decentralized peerto- peer networks, routing transactions is a fundamental challenge. Payment channel networks have some unique security and privacy requirements that make pathfinding challenging, for instance, network topology is not publicly known, and sender/receiver privacy should be preserved, in addition to providing atomicity guarantees for payments. In this paper, we present an efficient privacypreserving routing protocol, SPRITE, for payment channel networks that supports concurrent transactions. By finding paths offline and processing transactions online, SPRITE can process transactions in just two rounds, which is more efficient compared to prior work. We evaluate SPRITE’s performance using Lightning Network data and prove its security using the Universal Composability framework. In contrast to the current cutting-edge methods that achieve rapid transactions, our approach significantly reduces the message complexity of the system by 3 orders of magnitude while maintaining similar latencies. 

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4. Brief Announcement: Brokering with Hashed Timelock Contracts is NP-Hard

   https://doi.org/10.1145/3465084.3467952  

   Chan, Eric; Lesani, Mohsen (January 2021, PODC'21: Proceedings of the 2021 ACM Symposium on Principles of Distributed Computing)

   In recent years, many different cryptocurrencies have risen in popularity. Since coins vary in fiat value and functionality, it has become important to securely exchange between them. A common exchange method is hashed timelock contracts (HTLC). However, this method did not support brokerage transactions that allow parties to leverage assets they gain during the transaction. We consider HTLC with brokering. The transaction fees for HTLC is a direct function of the size of the leader set. Thus, brokers are interested in finding the minimum leader set of a given transaction graph. We show that finding the minimum leader set on general transaction graphs with brokering is NP-hard. We then introduce flower transaction graphs, a common type of transaction graphs with brokering, and show that finding the minimum leader set of a flower graph is also NP-hard through a reduction from the knapsack problem. 

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5. ZEXE: Enabling Decentralized Private Computation

   https://doi.org/10.1109/SP40000.2020.00050  

   Bowe, Sean; Chiesa, Alessandro; Green, Matthew; Miers, Ian; Mishra, Pratyush; Wu, Howard (January 2020, IEEE security privacy)

   Ledger-based systems that support rich applications often suffer from two limitations. First, validating a transaction requires re-executing the state transition that it attests to. Second, transactions not only reveal which application had a state transition but also reveal the application's internal state. We design, implement, and evaluate ZEXE, a ledger-based system where users can execute offline computations and subsequently produce transactions, attesting to the correctness of these computations, that satisfy two main properties. First, transactions hide all information about the offline computations. Second, transactions can be validated in constant time by anyone, regardless of the offline computation. The core of ZEXE is a construction for a new cryptographic primitive that we introduce, decentralized private computation (DPC) schemes. In order to achieve an efficient implementation of our construction, we leverage tools in the area of cryptographic proofs, including succinct zero knowledge proofs and recursive proof composition. Overall, transactions in ZEXE are 968 bytes regardless of the offline computation, and generating them takes less than a minute plus a time that grows with the offline computation. We demonstrate how to use ZEXE to realize privacy-preserving analogues of popular applications: private decentralized exchanges for user-defined fungible assets and regulation-friendly private stablecoins. 

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