Bitcoin is trustless and permissionless — anyone can use it without having to provide their real-world identity. This leads many people to think of Bitcoin as an anonymous network, where transactions are private, however in reality this is far from the truth. Bitcoin can work without a trusted third party in part because it is radically transparent — the entire transaction history is recorded and verified by everyone (well, every full node) and so is publicly available for anyone to analyze.
This full transaction history provides a structure known as the ‘transaction graph’ which is essentially how transactions are connected together, and shows how the bitcoin has moved between different addresses.
This public information can reveal a lot about the nature of transactions and be used to track the movement of funds and de-anonymize individual addresses. For example, although an individual bitcoin wallet address can be generated and used anonymously, much of the activity on Bitcoin is linked to real-world identities via regulated exchanges and custodians who are required to share customer information with authorities.
Using this information, companies that specialise in blockchain analysis can link any purchases or transactions back to the identity of the person who first purchased the coins.
The public nature of the transaction graph threatens the promise of Bitcoin as a fungible currency, where all coins have equal value, and can be used privately. Fortunately, there are several techniques that can be used to significantly improve the privacy of transacting with bitcoin that work by essentially obscuring and breaking the transaction graph.
What is a CoinJoin?
The most well known of these is called a ‘CoinJoin’ — this is essentially a combination of many separate individual transactions into a single larger one, such that it is not possible to link the transaction inputs (the origin of the coins) to the outputs (the destination addresses of the coins) with the on-chain data.
All the outputs in a given coinjoin transaction are effectively indistinguishable and share the same history. There are several different services and wallets that can perform coinjoin transactions, such as Wasabi and Samourai. Each of these relies on a centralised ‘coordinator’ that enables anonymous strangers to coordinate to build the combined transactions, which charges fees for the service. One important limitation of coinjoins, is that to maintain the indistinguishability of the transaction outputs, every participant must use the same value input.
CoinJoins have been used on the Bitcoin base layer for many years, and a substantial quantity of bitcoin has gained anonymity as a result. However, they are relatively expensive in terms of transaction fees as each coinjoin transaction must be confirmed on-chain. In addition, the ‘anonymity set’ (i.e. the number of coin histories your output could be linked to) is limited to the number of people you have directly been in a coinjoin transaction with (therefore usually requiring many transactions to get a good anonymity set).
What is a CoinSwap?
More recently another privacy-enhancing technique has been gaining attention, so, called CoinSwaps — which are essentially an exchange of coins (i.e. transaction outputs) between owners where no link is created in the on-chain transaction graph. This can be thought of as a transfer of the ownership of coin off-chain — if users can securely swap ownership of coins with different origins without any trace of this on the blockchain, then the assumption of using the transaction graph to track ownership is broken.
One way to imagine this process is that a number of people, each with a specific amount of bitcoin paid to a private key secured on a device (like an OpenDime), could meet, each throws their OpenDime into a pot, shake it up, and then each pick one at random.
Ownership of individual transaction outputs has changed, but is completely off-chain. As in the case of coinjoins, the swapped coins should be of equal value (but interestingly, unlike coinjoins, they don’t need to be equal value for privacy, only coordination).
Off-chain coinswaps are now possible due to the implementation of statechains: a Bitcoin layer-2 protocol that enables the secure transfer of a private key that controls a coin between owners. Currently, the only implementation of statechains, Mercury wallet, is proactively non-custodial, censorship-resistant and verifiable, but does require trust in the statechain entity to enforce atomicity of swaps.
The Mercury wallet operates a Chaumian (blinded) swapping protocol that prevents the server (conductor of the swap) from knowing who swapped with who in a multiparty swap. The fact that off-chain transfers are zero-fee and can be performed hundreds of times means that larger anonymity sets for each on-chain transaction are possible with this approach. The ‘on-chain’ anonymity set (assuming that mercury statecoins are easily identifiable) is the size of all coins of a given value deposited with the statechain entity (i.e. any coin could have been swapped with any other).
Both of these approaches have somewhat different benefits and costs, but as new privacy-enhancing tools are becoming available, Bitcoin can be used more privately now than ever before, and chain analysis/surveillance is becoming ever more futile.
The post Bitcoin Privacy 101: Key differences between a CoinSwap and a CoinJoin appeared first on CryptoSlate.
amoxicillin medicine
clomid in mexico
buy prednisolone 5mg
how much is tretinoin
how to order sildenafil online
What a stuff of un-ambiguity and preserveness of valuable familiarity about
unexpected feelings.
Hi, I check your new stuff like every week. Your story-telling
style is awesome, keep it up!
Great delivery. Sound arguments. Keep up the amazing effort.
I think this is among the most vital info for me. And i’m glad reading your article.
But wanna remark on some general things, The web site style is wonderful,
the articles is really nice : D. Good job, cheers
Definitely believe that which you stated. Your favorite justification appeared to be on the
internet the easiest thing to be aware of. I say to you, I certainly get annoyed
while people consider worries that they
plainly don’t know about. You managed to hit the nail upon the
top and defined out the whole thing without having side effect
, people could take a signal. Will likely be back to get more.
Thanks
Hi there, just wanted to tell you, I enjoyed this article.
It was practical. Keep on posting!
Wow! This blog looks just like my old one! It’s on a totally different topic but
it has pretty much the same page layout and design. Great choice of colors!
Thanks , I have just been looking for info approximately this
topic for a while and yours is the best I have came upon till now.
However, what concerning the conclusion? Are you sure about the supply?
I was suggested this web site through my cousin. I am not sure whether this
submit is written by way of him as no one else know such special about my trouble.
You are incredible! Thanks!
What’s up, after reading this amazing post i am also cheerful to share
my know-how here with mates.
Hi there very cool web site!! Man .. Beautiful .. Wonderful ..
I will bookmark your site and take the feeds also?
I am glad to seek out numerous useful info here within the publish,
we want develop more strategies on this regard, thank you for sharing.
. . . . .
I truly love your site.. Very nice colors & theme.
Did you build this site yourself? Please reply back as I’m wanting to create my own site
and want to find out where you got this from or just what the
theme is named. Many thanks!
Hi, this weekend is good in support of me, for the reason that this
point in time i am reading this impressive informative article here at my residence.
Howdy! This is kind of off topic but I need some help from an established
blog. Is it very difficult to set up your own blog? I’m not very techincal but I can figure things out pretty quick.
I’m thinking about creating my own but I’m not sure where to start.
Do you have any points or suggestions? Thank you
I read this article completely concerning the resemblance of hottest and preceding
technologies, it’s awesome article.
Hi! I’ve been following your website for some time now and finally got the bravery to go ahead and give you a shout out from Lubbock Tx!
Just wanted to tell you keep up the great work!
Thanks for your marvelous posting! I quite enjoyed reading it,
you are a great author. I will always bookmark your blog
and may come back in the foreseeable future.
I want to encourage one to continue your great work, have a nice holiday weekend!
Hey! Do you use Twitter? I’d like to follow you if that would be ok.
I’m absolutely enjoying your blog and look forward to new updates.
Pretty section of content. I just stumbled upon your web site and in accession capital to assert that I acquire actually enjoyed account
your blog posts. Any way I will be subscribing to your augment and
even I achievement you access consistently quickly.
great submit, very informative. I wonder why the other specialists of this sector do not
realize this. You should continue your writing. I am sure, you have
a great readers’ base already!
Write more, thats all I have to say. Literally, it seems as though you relied on the video
to make your point. You obviously know what youre talking about, why throw away your intelligence on just posting videos to your site when you could be giving us
something enlightening to read?
Thank you a lot for sharing this with all folks you actually recognise what you are talking approximately!
Bookmarked. Please additionally seek advice from my site =).
We could have a link alternate arrangement between us
Heya i’m for the first time here. I came across this board and I
find It truly useful & it helped me out much. I hope to give something back and help others like you helped me.
Wow, that’s what I was seeking for, what a stuff!
existing here at this web site, thanks admin of this web site.
Hello! Do you know if they make any plugins to protect against hackers?
I’m kinda paranoid about losing everything I’ve worked hard
on. Any recommendations?
Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something.
I think that you could do with some pics to drive the message home a little
bit, but other than that, this is wonderful blog.
A great read. I will certainly be back.
Whats up are using WordPress for your blog platform?
I’m new to the blog world but I’m trying to get started and set up my own. Do you require any html coding knowledge to make your own blog?
Any help would be really appreciated!
Hey! Someone in my Facebook group shared this website with us so I
came to take a look. I’m definitely enjoying the information. I’m book-marking and will be tweeting this to my followers!
Superb blog and excellent design.
Very nice post. I just stumbled upon your blog and wanted to say that
I have really enjoyed browsing your blog posts.
After all I will be subscribing to your rss feed and I hope you write again very
soon!
Appreciate this post. Let me try it out.
What’s Going down i’m new to this, I stumbled upon this I’ve
found It absolutely useful and it has helped me out loads.
I’m hoping to contribute & help different customers like its aided me.
Good job.
Wonderful goods from you, man. I’ve understand your stuff previous
to and you are just extremely excellent. I really like what you’ve acquired here,
really like what you are stating and the way in which you
say it. You make it entertaining and you still care for to keep it smart.
I cant wait to read far more from you. This is actually a
great site.
Today, I went to the beach with my kids. I found a sea shell and gave it to my 4 year
old daughter and said “You can hear the ocean if you put this to your ear.” She put
the shell to her ear and screamed. There was a hermit crab inside and it pinched
her ear. She never wants to go back! LoL I know this is completely off topic but
I had to tell someone!
I have been exploring for a bit for any high quality articles or blog posts on this kind of space .
Exploring in Yahoo I finally stumbled upon this web site.
Studying this info So i am satisfied to show that I’ve a very excellent uncanny feeling
I discovered just what I needed. I so much certainly will make certain to don?t disregard this
website and provides it a look regularly.
I love what you guys are up too. Such clever work and coverage!
Keep up the excellent works guys I’ve incorporated you guys to our blogroll.
It’s remarkable for me to have a web site, which is
valuable for my knowledge. thanks admin
My family members every time say that I am killing my time here
at web, except I know I am getting knowledge every day by reading thes pleasant articles or reviews.
We stumbled over here by a different page and thought I might as
well check things out. I like what I see so now i am following you.
Look forward to looking into your web page for a second time.
Having read this I thought it was really informative.
I appreciate you spending some time and effort to put this article together.
I once again find myself personally spending way too
much time both reading and commenting. But so what, it was still worth it!
Hello, I read your blog regularly. Your story-telling
style is witty, keep it up!
I do not even know how I ended up here, but I thought this post was great.
I do not know who you are but definitely you are going to a famous blogger if you aren’t already 😉 Cheers!
Hi there, this weekend is pleasant designed for me, because this time i am reading this enormous informative post here at my home.
Have you ever thought about adding a little bit more than just your articles?
I mean, what you say is valuable and everything. Nevertheless imagine if
you added some great images or videos to give your posts more,
“pop”! Your content is excellent but with images and video clips, this blog
could definitely be one of the best in its field.
Fantastic blog!
hey there and thank you for your information – I’ve definitely picked up something new from right here.
I did however expertise several technical points using this web site,
as I experienced to reload the site a lot of times previous to I could get it to load
properly. I had been wondering if your web hosting is OK?
Not that I am complaining, but sluggish loading instances times will often affect your placement
in google and could damage your high quality score if advertising and marketing with Adwords.
Well I’m adding this RSS to my e-mail and could look out for much more of your respective
interesting content. Ensure that you update this again very soon.
I don’t even understand how I finished up right here, but I thought this submit used to be great.
I do not realize who you are but certainly you’re going to a famous blogger if
you aren’t already. Cheers!
Hey there are using WordPress for your site platform?
I’m new to the blog world but I’m trying to get started and set
up my own. Do you need any html coding knowledge
to make your own blog? Any help would be greatly appreciated!
Hello! Do you know if they make any plugins to protect against hackers?
I’m kinda paranoid about losing everything I’ve worked hard on. Any recommendations?
I think this is one of the most vital info for me. And i’m glad reading your article.
But want to remark on some general things, The site style is great, the articles is really
excellent : D. Good job, cheers
My relatives always say that I am wasting my time here at net, but I know I am getting knowledge all the time by reading
thes pleasant content.
와~ 이건 진짜 대박이네요. 제가 그토록 원하던 정보들이네.
저또한 똑같이 해줘야되겠는데, 저도 가치를 제공하고 싶은데요 그거아시나 혹시 여자친구 만드는 정보 말도 안되는 이야기라고는 하지만 이렇게
쉽게 알수 없는 내용를 저만 알고 있는 방법이 있는데 제가 알려드리겠습니다.
한번 믿어보시고 확인 해보시죠!
I was suggested this website by my cousin. I am not sure whether this post is written by him as nobody else know such detailed about my difficulty.
You’re incredible! Thanks!
I have read so many posts about the blogger lovers however this paragraph is genuinely a nice article, keep it up.
Hi there Dear, are you in fact visiting this website regularly, if so then you will absolutely take good know-how.
If some one wishes to be updated with hottest technologies then he must
be pay a quick visit this site and be up to date daily.
Pretty! This has been a really wonderful post.
Many thanks for supplying this information.
Good site you have here.. It’s difficult to find high-quality writing
like yours nowadays. I honestly appreciate people like you!
Take care!!
I like it when individuals get together and share
views. Great blog, keep it up!
This is a really good tip particularly to those new to
the blogosphere. Simple but very accurate information… Appreciate your sharing this one.
A must read article!
Simply desire to say your article is as amazing. The clearness in your post
is just nice and i could assume you’re an expert on this subject.
Well with your permission allow me to grab your RSS feed to keep up to date with forthcoming post.
Thanks a million and please keep up the rewarding
work.