Tags:Address Clustering, Blockchain Analysis, Decentralised Exchange and Privacy
Abstract:
The Bisq trade protocol is a key component of the Bisq decentralised exchange, allowing users to trade with one another in a decentralised manner. However, the protocol publishes trade data to the Bitcoin blockchain. In this paper, we analyse the privacy risks this creates for users. Specifically, we present two new heuristics, one to identify Bisq trades on the Bitcoin blockchain and another to cluster the addresses used in those trades. We demonstrate that these heuristics are effective in identifying the trading activity of Bisq users and aggregating their trading activity across multiple trades. We conclude with suggestions as to how best to defeat these heuristics and improve the privacy aspects of the Bisq trade protocol.
Decentralisation over Privacy: an Analysis of the Bisq Trade Protocol