The price of anonymity: empirical evidence from a market for Bitcoin anonymization

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Abstract
We present the first measurement study of JoinMarket, a growing marketplace for more anonymous transfers in the Bitcoin ecosystem. Our study reveals that this market is funded with multiple thousand bitcoins and generated a turnover of almost 29.5 million USD over the course of 13 months. Assessing the resilience of the market against a well-funded attacker, we discover that in a typical scenario, a selective attack with a 90% success rate requires an investment of 14 000–54 000 USD (which is recoverable after the attack). We present economic arguments to explain the existence of this novel market for anonymity and underpin the hypothesis of heterogeneous time preference with empirical data. Key words: economics of privacy; measurement; anonymity; Bitcoin; CoinJoin