Deanonymization of Litecoin Through Transaction-Linkage Attacks

With the development of blockchain technology, the use of cryptocurrencies in online payments has become increasingly prevalent. Litecoin, proposed in 2011, is currently the fifth-largest cryptocurrency in market value. Due to certain characteristics, such as the use of pseudonyms as transaction addresses, user privacy could be protected to some extent. However, there are some problems about its privacy guarantees.In this paper, we aim to reveal the severity of deanonymization attacks on online Litecoin payments. Firstly, we simulate purchases on merchant websites accepting Litecoin and monitor trackers embedding on information and payment pages. Secondly, we conduct transaction-linkage attacks on simulated digital and physical transaction flows, respectively. Our results show that a tracker is more likely to find the target transaction on Litecoin blockchain by collecting the digital transaction flows and implementing transaction-linkage attacks. The number of digital transaction flows with anonymous set size 1 and 2 account for 95% and 5% of all digital transaction flows, respectively. The success rate of the transaction-linkage attack is 0.975. To get the optimal uncertainty parameters of transaction-linkage attacks, we introduce a refined deanonymization attack by making real purchases. Finally, we present two new privacy protection measures against transaction-linkage attacks.