Zcash Network Privacy: An Assessment of Current State and Future Work.

Network privacy is a critical component to protecting users’ privacy online, even when encryption protocols protect against eavesdropping adversaries from learning the content of network traffic directly. Similarly, while blockchains like Zcash use privacy-preserving cryptographic protocols to hide identifiable information about user identities and transaction information persisted to the blockchain, additional information such as a user’s IP address can still leak to adversaries actively observing the network as these transactions are taking place and allow for deanonymization attacks.

As a first step towards improving Zcash network privacy, we at the Zcash Foundation have created a more comprehensive analysis of the current state of network privacy in Zcash, identified possible attack vectors and adversaries, and clarified where identifiable information about Zcash users can be leaked even when shielded transactions are used. Within this analysis, we classify threats that are of top-level priority, threats we hope to address in the near future, and threats that we consider to be out of scope. Finally, we consider a range of network privacy mechanisms and assess their effectiveness against mitigating these threats.

In writing this analysis, we have already had many helpful discussions and feedback from members of the Zcash community. We hope to continue to hear from more Zcash community members about potential adversaries we missed or attack vectors that we did not consider. More eyes improves the security of any product, and Zcash is no different. We look forward to hearing your thoughts and questions, and to implementing these network privacy improvements in Zebra as next steps.

Our complete analysis and findings can be found here.