Privacy and security, as well as being in control of these things, are paramount in the cryptocurrency world.
“The whole decentralized cryptocurrency business is about putting you in control of the digital coins,” says Aravinda Thyagarajan, a postdoctoral researcher in the computer science department advised by CyLab’s Elaine Shi. “You should control your coins, and you don’t want to give out any information about them.”
This week, Thyagarajan will present a new paper outlining a new protocol for better privacy and security in cryptocurrency exchanges. The paper “Universal Atomic Swaps: Secure Exchange of Coins Across All Blockchains” will be presented at the 2022 IEEE Symposium on Security and Privacy.
Now, if two people or companies want to trade one cryptocurrency for another — say 1 Bitcoin for 1 Ethereum — they can trade directly with each other, but there’s always a chance that one of the two parties is dishonest and their goal won’t stick through the deal. Another option is to have a third party broker the deal. But what if the exchange service is an adversary and steals the coins of both parties?
“In the wild west of cryptocurrency, nobody should be trusted,” says Thyagarajan.
There is also a privacy issue. If an e-commerce site only accepts a specific cryptocurrency and you only have coins in another cryptocurrency, you will need to make an exchange to the compatible currency before purchasing on the site. These exchanges may reveal sensitive information.
“You lose a bit of privacy,” says Thyagarajan. “With sophisticated mechanisms, people can learn some probability information about your wealth.”
Thyagarajan’s paper outlines a protocol that addresses these security and privacy concerns. First, the protocol is universal – it allows exchanges across all current and future cryptocurrencies. Secondly, the swap protocol ensures that the swap takes place honestly or not at all, which means nobody maliciously loses coins without relying on third parties. And finally, the protocol supports the exchange of multiple types of coins – e.g. B. Bitcoin, Ethereum, Dogecoin, etc. – in a single swap.
“With this protocol, you can shop on this e-commerce site with a coin that is not the coin they accept and maintain your privacy,” says Thyagarajan. “It’s possible because you don’t rely on third-party services and also because it doesn’t rely on specifics of the underlying currency.”
All of this requires a massive amount of computing power, Thyagarajan says, so it’s currently not possible to do it on a laptop or phone, which presents an opportunity for future work. However, for currently major currencies such as Bitcoin, Ethereum, etc., Thyagarajan’s paper represents an efficient exchange solution that can now run even on low-end devices.
paper reference
Universal Atomic Swaps: Securely exchange coins across all blockchains
- Sri Aravinda Krishnan Thyagarajan, Carnegie Mellon University
- Giulio Malavolta, Max Planck Institute for Security and Data Protection
- Petro Moreno-Sanchez, IMDEA Software Institute
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