Suppose Alice has bitcoins and wants to send them with maximal privacy, so she creates a special kind of transaction. For anyone looking at the blockchain her transaction appears completely normal with her coins seemingly going from bitcoin address A to address B. But in reality her coins end up in address Z which is entirely unconnected to either A or B.
Now imagine another user, Carol, who isn't too bothered by privacy and sends her bitcoin using a regular wallet. But because Carol's transaction looks exactly the same as Alice's, anybody analyzing the blockchain must now deal with the possibility that Carol's transaction actually sent her coins to a totally unconnected address. So Carol's privacy is improved even though she didn't change her behaviour, and perhaps had never even heard of this software. In a world where advertisers, social media and other companies want to collect all of Alice's and Carol's data, such privacy improvement would be incredibly valuable. And also the doubt added to every transaction would greatly boost the fungibility of bitcoin and so make it a better form of money. This undetectable privacy can be developed today by implementing CoinSwap. The software could be standalone as a kind of bitcoin mixing app, but it could also be a library that existing wallets can implement allowing their users to send Bitcoin transactions with much greater privacy. For the last few months I've been working on implementing this project. Here it is: https://github.com/bitcoin-teleport/teleport-transactions/ The project can create multi-transaction CoinSwaps (intended to avoid amount correlation), and multi-hop CoinSwaps (intended to stop one single maker being able to unmix a taker's CoinSwap). Just for fun I created a 5-hop CoinSwap on testnet. Here are the transaction IDs of each funding transaction. Each hop has 3 individual transactions. taker's outgoing txes: https://blockstream.info/testnet/tx/f45349bd279bea20b8b218300f8e2416abf28f3858470ad8c5eb2f6cd5ec10a9 https://blockstream.info/testnet/tx/40ea5c9e478b66fa3f615c2b8d3accfd69308443d90a5353de669767cb02c51f https://blockstream.info/testnet/tx/8fe245e9c433127af4df8ff8853650808e3281fed7de6bfda62066a3fd3ad36e maker funding txes: https://blockstream.info/testnet/tx/3d9b879866ad136f9fe6e80599e1b97d610b6330be3ab4aa7df4161fce1e41d4, https://blockstream.info/testnet/tx/fa11e778d135be28b4e35498fc668c5aba7c70dcc43334b39e7488bd1259e8be, https://blockstream.info/testnet/tx/a7713452bab711c09be83a8c630fb91127771ed99cf15b528eacd28b00ba6b20, maker funding txes: https://blockstream.info/testnet/tx/245e1e87d83a4bef06ceb8933c758137ee2f7ba7aa66800ebb7103707d5de5f7, https://blockstream.info/testnet/tx/15727b91e09a80634587f6210bdcba8808b93e4a780c55dd113ee85314db45c4, https://blockstream.info/testnet/tx/94e4e4e9e8fc2012158ed068145c8b883c295b37f5b3b6cba7a21c229d4da103, maker funding txes: https://blockstream.info/testnet/tx/1384d58e534543e22e4f23a367728bff12177ee9af01b036c397cfca9bbe2eb8, https://blockstream.info/testnet/tx/eff3b1367f403c13927ddcb01c6d3c5c0d46076f7cb4419f8a18d6b62d884540, https://blockstream.info/testnet/tx/617c52caec2f7f17f3ebd1cab80233cdc1b414591f1cc49affbd828ffec10278, maker funding txes (also taker's incoming txes): https://blockstream.info/testnet/tx/8fde61974a4e0801ae5b76b620e2effd6c837310c1bd76d738216451ae1226e3, https://blockstream.info/testnet/tx/6491b85ef73a8f88e276a9b0f951c09e0367851a83aa49ffee8f8ad095f50de2, https://blockstream.info/testnet/tx/363b6803b7e3ed45472277448ce9938e3e73167a67762d6a9ac621243b8db019, The so-called taker organized the whole thing. They decided what the CoinSwap amount should be (0.05 tBTC in this case), decided which makers to route over depending on their fees, how many transactions and makers there would be. The only thing the makers do is follow the protocol and collect their CoinSwap fees, they are not meant to even know their position in the route. Because the taker chose how much bitcoin to coinswap and when, they paid a fee to each maker to provide an incentive for the makers to keep the software running. To a passive observer of the blockchain a single-hop CoinSwap is as private as a multi-hop, so I suspect in practice most users will just create 2-hop CoinSwaps. The project is still a work in progress. All kinds of attacks are possible right now, so the it shouldn't be used on mainnet with real money yet. Also right now the CoinSwap addresses created by the project appear as 2-of-2 multisignature addresses, but the plan is to use ECDSA-2P which will make them look the same as regular single-signature addresses which is needed before the thing massively improves privacy and fungibility. CoinSwap is the next generation of bitcoin on-chain privacy tech. It improves on CoinJoin because it breaks the transaction graph, and even improves the privacy of people who don't use it. CoinSwap also uses less block space for the same privacy and therefore is cheaper in miner fees. Links: * Design document: https://gist.github.com/chris-belcher/9144bd57a91c194e332fb5ca371d0964 * Discussion: `##coinswap` IRC channel on the freenode network _______________________________________________ bitcoin-dev mailing list firstname.lastname@example.org https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev