Blockchain is a disruptive technology that promises a multitude of benefits, such as transparency, traceability, and immutability. However, this unique bundle of key characteristics has proved to be a double-edged sword that can put users’ privacy at risk. Unlike in traditional systems, Bitcoin transactions are publicly and permanently recorded, and anyone can access the full history of the records. Despite using pseudonymous identities, an adversary can undermine users’ financial privacy and reveal their actual identities by using advanced heuristics and techniques to identify possible links between transactions, senders, receivers, and consumed services (e.g., online purchases). Hence, a multitude of approaches has been proposed to reduce financial transparency and enhance users’ anonymity. These techniques range from mixing services to off-chain transactions that address different privacy issues. In this paper, we particularly focus on comparing and evaluating privacy techniques in the Bitcoin blockchain (which can be applied in (Unspent Transaction Output (UTXO) based blockchains), present their limitations, and highlight new challenges.

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