Ivan Bogatyy has cracked through the privacy of the Mimblewimble privacy protocol, using sniffer nodes to intercept transactions before encryption with a 95.5% success rate. Specifically, over the course of five days, Bogatyy was able to determine the origin and destination of approximately 8,500 out of 8,900 transactions.
Mimblewimble is a privacy protocol that is distinct from Monero and Zcash, and is used by the cryptocurrencies Grin, Beam, and Tari. The protocol obfuscates the origin and destination of a transaction via full-block cut-through aggregation and the dandelion protocol.
With full-block cut-through aggregation, all of the transactions in a block are aggregated into one bigger transaction with all of the inputs and outputs. However, smaller transactions are added to this bigger transaction one by one, and Bogatyy created sniffer nodes that can intercept pending transactions before they are finalized into a bigger transaction.
He also exploited the dandelion protocol, by making sniffer supernodes which immediately log transactions as soon as they are spread to the rest of the network. That being said, 4.5% of transactions were successfully protected by the dandelion protocol, but Bogatyy believes that this small fraction of transactions could be exposed with enough sniffer nodes.
Ultimately, Bogatyy indicates there is no straightforward way to fix Mimblewimble, and for now cryptocurrencies that use it can no longer be considered private. This is especially true since Bogatyy released the code to conduct sniffer node attacks to the public.
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