Research Summary: Studying Bitcoin privacy attacks and their Impact on Bitcoin-based Identity Methods

A Decentralized Identifier (DID) is preferred over traditional identification methods for its promise of privacy and security by virtue of it living on a public blockchain. This seems theoretically true, for now.

Attacks on public blockchain on which these DIDs are hosted have brought us back to the point of lack of privacy. In other words, we still face the privacy challenges that pushed us to use the DID methods in the first place.

I enjoyed reading this summary as it progressed from the cause, impact, and to the solutions to the challenge. However, I came across a research summary on this forum by @Tolulope which offers interesting solutions like off-chain transactions, Coinjoin, etc., to the studied challenges.

Applying these solutions would go a long way to mitigating the challenges of did:btcr as a decentralized identifier.

@simin Do know if there are DID methods present on other blockchains such as Ethereum? Since this research is focused on the impact of privacy attacks on a DID method on the Bitcoin Blockchain, it would be great to extend the research to other blockchains to have a holistic understanding of the impact of privacy attacks on the whole DLT.

If DID methods similar to did:btcr exist on other blockchains, they could be studied to:

  1. compare with the results obtained from the Bitcoin Blockchain

  2. make conclusions on the best solutions to apply in solving these privacy issues, since different blockchains have different consensus mechanisms and algorithms.

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