Security Issues & Seclusion in Bitcoin System

Abstract

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.