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The ability of entities with large numbers of nodes to track the
origination of Bitcoin transactions is very similar to an attack on
the Freenet project.

The Freenet project addressed this weakness by via a technique they
called "Darket" - which means that nodes would only connected to a
defined set of trusted peers instead of being open to all connections
(Opennet) An individual Freenet node can operate in Opennet mode, or
Darknet mode, or mixed mode. [1]

This approach would be beneficial to Bitcoin as well to reduce privacy
leaks due to harvesting attacks.

Proposal:

Allow Bitcoin nodes to create authenticated connections with trusted
peers via CurveCP [2]. Nodes that have at least one CurveCP peer only
broadcast their transactions to those peers.

Use of CurveCP requires both sides of the connection to know each
other's long term public key. This key can be packaged in a structure
similar in concept to a Freenet node reference.

A Bitcoin node reference consists of a JSON structure containing one
or more "externalip" elements followed by one "pubkey" element. The
structure is then clearsigned by the long term CurveCP public key
contained in the "pubkey" element.

Users who wish to set up a secure connection between their nodes would
first use an API command to generate their node references, exchange
these files, and copy them to the ~/.bitcoin/curvecp directory with a
.ref extension. The node only accepts CurveCP connections from, and
attempts CurveCP connection to, peers whose references are present in
that directory.

Instead of listening both for regular TCP and CurveCP connections on
the same port, CurveCP connections would take place on a separate
port, designated by -bind_curvecp, -port_curvecp, and -externalip_curvecp

If -bind_curvecp is specified, the node will always listen for
incoming CurveCP connections, -listen=0 can be set to disallow
non-authenticated incoming connections.

Relationship with Tor:

This proposal would work along with, or independently of Tor usage.

The same network monitoring techniques which can track an originating
transaction to a particular IP address could do the same thing for a
node which is listening as a hidden service, and any technique for
deanonymising hidden services could then identify the point of origin.

Currently the only way to configure a node to submit its transactions
anonymously to the network is to make the node non-listening, which
means it can not contribute to the network.

This proposal would allow nodes to contribute to the network as
listening nodes, while retaining privacy with regards to transactions
originating from themselves.

SPV peers:

CurveCP connections also can be created between full nodes and SPV
nodes, in which case transactions originating from the SPV peers would
be routed as if they originated from the full node.


[1] https://wiki.freenetproject.org/Darknet
[2] http://curvecp.org

- -- 
Justus Ranvier                   | Monetas <http://monetas.net/>
<mailto:jus...@monetas.net>      | Public key ID : C3F7BB2638450DB5
                                 | BM-2cTepVtZ6AyJAs2Y8LpcvZB8KbdaWLwKqc
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