Designing a dynamic privacy index for assessing blockchain privacy and security in decentralized systems

The continued expansion of decentralized blockchain technology means that ensuring transaction confidentiality and user anonymity is an increasingly important issue. Although a great deal of research has been conducted regarding how privacy protocols are designed and developed, little comprehensive evaluation of the many privacy solutions currently exists. To fill this void, we categorized the available privacy solutions according to their key components of blockchain technology and cryptography and analyzed the criteria used for evaluating these methods. We found that a significant number of the privacy solutions had not yet been subjected to a thorough evaluation. To address this issue, we analyzed additional variables that either enhance or detract from blockchain privacy and created an evaluation framework for determining whether a privacy solution is effective based on these variables. Additionally, we provided a quantifiable privacy performance metric for measuring the effectiveness of blockchain privacy solutions. Within this framework, we assessed privacy performance through a combination of evaluating the effectiveness, resiliency, and risk of each privacy-enhancing feature. Finally, we implemented the dynamic privacy index to demonstrate the practical usability of the privacy index and provide a foundation for future empirical assessments of blockchain privacy.