BTC.com engineer and concerned Monero user ‘Lacksfish’ has outlined a troubling bias towards the use of coinbase (block reward) transactions as decoys (also known as mixins) occuring on the post-fork Monero chain, with potentially troublesome privacy implications. The Github issue outlined here points towards a concerning number of recent transactions in which there is a disproportionate number of block reward transactions utilised as decoys in the ring signature. A fix has now merged and a new version of the Monero CLI has now been released, but a number of other wallets are yet to upgrade. [1][2][3]
The changes to the decoy selection algorithm have been present in the Monero codebase for several months, but its impact appears to have been exacerbated by the recent transaction size improvements related to this month’s hard-fork which introduced the use of highly efficient bulletproofs. These more compact zero-knowledge proofs created a notable reduction in average transaction fees overnight which many users are pleased with, but the transaction size decrease has also resulted in a greater transaction capacity per block, and as a consequence there appears to have been an increase in the number of empty blocks being mined.[4][5][6]
Smaller transactions on the blockchain results in significant gains to transaction throughput, as more unconfirmed transactions can be included with each block mined. As Monero targets a reasonably rapid two minute block time, it isn’t uncommon for the mempool to be completely cleared within a couple of blocks, at which point the next block will be empty if no new transactions are broadcast over the following minutes. It is the growing number of these recent empty blocks that appear to be associated with a potential reduction in the privacy
