Author: Michael Folkson 2022-08-06 12:55:49
Published on: 2022-08-06T12:55:49+00:00
In a message to Bitcoin Developers, a user named 'alicexbt' asked whether it makes sense to trade replacement transactions for privacy. They shared basic details on how this could be done and requested opinions or suggestions for improvement. Another user named Michael replied, stating that he was struggling to understand the purpose of this scheme in terms of privacy, especially considering the added protocol complexity. He stated that a 2-party coinjoin or coinswap could offer similar privacy benefits without the extra complexity. Alicexbt's proposal involved creating an API managed by a third party named Carol, which would enable trades using a 2-of-3 multisig setup. Alice and Bob would create orders for replacement transactions, which would involve swapping outputs with a counterparty. The matching process could either be automated or done manually by Bob. Both parties would lock their bitcoin and share outputs with each other, before signing the transaction and broadcasting it. The positives of this scheme were increased privacy, while the negatives included extra fees, time, and the need to lock bitcoin with the same amount used in the initial transaction.
Updated on: 2023-06-15T23:40:17.454612+00:00