Footprints on the Blockchain: Information Leakage in Distributed Ledgers

19 Pages Posted: 12 Jan 2017

See all articles by Rune Aune

Rune Aune

Independent

Maureen O'Hara

Cornell University - Samuel Curtis Johnson Graduate School of Management

Ouziel Slama

Independent

Date Written: January 10, 2017

Abstract

This paper examines information leakage in distributed ledgers. We show how the lack of time priority in the period between the publication of a transaction and its validation by miners or designated participants can expose a transaction’s “footprint” to the market, resulting in potential front-running and manipulation. We propose a cryptology-based approach for solving information leakage problems in distributed ledgers that relies on using a “hash” (or mathematical identifier) to secure time-priority followed by a second communication revealing more features of the underlying market transaction. Solving the information leakage problem greatly expands the potential applications of private distributed ledger technology.

Suggested Citation

Aune, Rune and O'Hara, Maureen and Slama, Ouziel, Footprints on the Blockchain: Information Leakage in Distributed Ledgers (January 10, 2017). Available at SSRN: https://ssrn.com/abstract=2896803 or http://dx.doi.org/10.2139/ssrn.2896803

Rune Aune

Independent

Maureen O'Hara (Contact Author)

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States
607-255-3645 (Phone)
607-255-5993 (Fax)

Ouziel Slama

Independent

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