Biblio

In the dawn of crypto-currencies the most talked currency is Bitcoin. Bitcoin is widely flourished digital currency and an exchange trading commodity implementing peer-to-peer payment network. No central athourity exists in Bitcoin. The users in network or pool of bitcoin need not to use real names, rather they use pseudo names for managing and verifying transactions. Due to the use of pseudo names bitcoin is apprehended to provide anonymity. However, the most transparent payment network is what bitcoin is. Here all the transactions are publicly open. To furnish wholeness and put a stop to double-spending, Blockchain is used, which actually works as a ledger for management of Bitcoins. Blockchain can be misused to monitor flow of bitcoins among multiple transactions. When data from external sources is amalgamated with insinuation acquired from the Blockchain, it may result to reveal user's identity and profile. In this way the activity of user may be traced to an extent to fraud that user. Along with the popularity of Bitcoins the number of adversarial attacks has also gain pace. All these activities are meant to exploit anonymity and privacy in Bitcoin. These acivities result in loss of bitcoins and unlawful profit to attackers. Here in this paper we tried to present analysis of major attacks such as malicious attack, greater than 52% attacks and block withholding attack. Also this paper aims to present analysis and improvements in Bitcoin's anonymity and privacy.

This paper identifies trust factor and rewarding nature of bitcoin system, and analyzes bitcoin features which may facilitate bitcoin to emerge as a universal currency. Paper presents the gap between proposed theoretical-architecture and current practical-implementation of bitcoin system in terms of achieving decentralization, anonymity of users, and consensus. Paper presents three different ways in which a user can manage bitcoins. We attempt to identify the security risk and feasible attacks on these configurations of bitcoin management. We have shown that not all bitcoin wallets are safe against all possible types of attacks. Bitcoin core is only safest mode of operating bitcoin till date as it is secure against all feasible attacks, and is vulnerable only against block-chain rewriting.

Address clustering tries to construct the one-to-many mapping from entities to addresses in the Bitcoin system. Simple heuristics based on the micro-structure of transactions have proved very effective in practice. In this paper we describe the primary reasons behind this effectiveness: address reuse, avoidable merging, super-clusters with high centrality,, the incremental growth of address clusters. We quantify their impact during Bitcoin's first seven years of existence.