Bitcoin is the first and most popular currency based on the blockchain. Blockchain is a data structure that records bitcoin transactions publicly and permanently. Recent studies have shown that the privacy of bitcoin users is severely threatened due to the public nature of the blockchain. This affects even the fungibility, a fundamental property required in every payment system, so no two coins are completely equal. As a result, there is so much research in these years, each of which is somehow enhancing the privacy of users. One of the first and most important approaches in this concept is CoinJoin transactions, where participants merge their transactions and form a final CoinJoin transaction. Although this transaction is simple, it can improve the privacy level of the participants. However, it has the main limitation. To prevent the attacker from deriving the original single transactions, CoinJoin transaction needs to have fixed amounts in the outputs which makes it impossible to use these transactions as payments (transactions with arbitrary outputs). It makes so many transactions which are merely just for mixing, added to the blockchain. As a result, it greatly affects the scalability of the system. On the other hand, considering the fees of these transactions, many users do not join the process of mixing. In this thesis, we propose a framework with eight features for assessing the privacy of cryptocurrencies. For each feature, quantitative criteria are gathered to measure the privacy of the system in terms of that feature. Also, in this thesis, utilizing the Knapsack mixing algorithm and the Secure Multi-Party Computation, a protocol is proposed that adapts CoinJoin transactions to payment transactions while protecting privacy not only against blockchain observers but against other transaction participants. This method, by splitting the outputs, prevents amount analysis and it does not let the sender and the receiver know each other address directly. The security of the proposed protocol is based on Secure Multi-Party Computation functionality and basic cryptographic tools. Bitcoin , Cryptocurrency , Privacy , CoinJoin Transaction , Knapsack Mixing.
