Author: Chris Belcher 2021-02-17 22:27:28
Published on: 2021-02-17T22:27:28+00:00
A new privacy improvement called CoinSwap has been developed for Bitcoin transactions. It allows users to create a special kind of transaction that appears completely normal with the coins seemingly going from one address to another, but in reality, they end up in an entirely unconnected address. This privacy improvement is incredibly valuable in a world where advertisers and social media companies want to collect user data. CoinSwap can be implemented as a standalone app or a library that existing wallets can adopt to send Bitcoin transactions with much greater privacy.The project can create multi-transaction CoinSwaps and multi-hop CoinSwaps to avoid amount correlation and prevent a single maker from being able to unmix a taker's CoinSwap. A user, called the taker, organizes the whole thing and decides what the CoinSwap amount should be, which makers to route over depending on their fees, how many transactions, and makers there would be. Makers follow the protocol and collect their CoinSwap fees without knowing their position in the route. The taker pays a fee to each maker to incentivize them to keep the software running.A passive observer of the blockchain cannot distinguish between a single-hop CoinSwap and a multi-hop CoinSwap, making it a more private alternative to CoinJoin. The project is still a work in progress, and all kinds of attacks are possible right now, so it shouldn't be used on mainnet with real money yet. The CoinSwap addresses created by the project appear as 2-of-2 multisignature addresses, but the plan is to use ECDSA-2P to make them look the same as regular single-signature addresses before improving privacy and fungibility massively. CoinSwap is the next generation of Bitcoin on-chain privacy tech, which improves privacy and increases fungibility while using less block space and being cheaper in miner fees.
Updated on: 2023-05-21T00:47:15.146076+00:00