An Empirical Analysis of Anonymity in Zcash

TL;DR

This paper empirically evaluates Zcash's anonymity features, revealing that while private use is feasible, simple heuristics can significantly reduce its effective anonymity set.

Contribution

It provides a comprehensive analysis of Zcash's anonymity in real-world deployment, highlighting vulnerabilities and the impact of usage patterns.

Findings

Zcash's privacy features can be compromised by identifiable transaction patterns.

Simple heuristics can significantly shrink the anonymity set in Zcash.

Private transactions in Zcash are vulnerable to analysis despite cryptographic protections.

Abstract

Among the now numerous alternative cryptocurrencies derived from Bitcoin, Zcash is often touted as the one with the strongest anonymity guarantees, due to its basis in well-regarded cryptographic research. In this paper, we examine the extent to which anonymity is achieved in the deployed version of Zcash. We investigate all facets of anonymity in Zcash's transactions, ranging from its transparent transactions to the interactions with and within its main privacy feature, a shielded pool that acts as the anonymity set for users wishing to spend coins privately. We conclude that while it is possible to use Zcash in a private way, it is also possible to shrink its anonymity set considerably by developing simple heuristics based on identifiable patterns of usage.