CoinLayering: An Efficient Coin Mixing Scheme for Large Scale Bitcoin Transactions

Coin mixing can be used to preserve identity privacy of Bitcoin owners, by engaging a set of middlepersons (i.e.,
$Mix$
) to temporarily hold the transacting Bitcoins and remove the linkage between the transacting parties. However, existing schemes are generally not scalable due to limitations associated with the anonymity set and self-credibility. In this article, we propose an efficient coin mixing scheme (hereafter referred to as CoinLayering). To achieve strong anonymity, CoinLayering randomly selects two sets of middlepersons to respectively execute Bitcoin holding and Bitcoin trading. The seller can also select lower-loaded sets of middlepersons in the shortest time possible. We also design two coin mixing protocols, CoinLayering-PA and CoinLayering-PB, to mitigate the risk due to misbehaving middlepersons and
$Supervisor$
. We then mathematically prove that CoinLayering achieves both strong anonymity and self-credibility, and evaluate its performance to demonstrate its scalability.