What is CoinJoin?
A Bitcoin privacy technique that combines multiple users' transactions into a single transaction, making it difficult to determine which inputs correspond to which outputs.
CoinJoin improves Bitcoin privacy by breaking the transaction graph that links senders to receivers.
How It Works
- Multiple users agree to create a transaction together
- All inputs and outputs are combined into one transaction
- Each user signs only their own input
- The amounts are equal, so observers can't match inputs to outputs
Implementations
- Wasabi Wallet: Automated CoinJoin with coordinator
- JoinMarket: Decentralized CoinJoin marketplace
- Whirlpool (Samourai): Structured CoinJoin protocol (service seized in 2024)
Limitations
- Requires other participants to mix with
- Fixed denomination amounts reduce flexibility
- Chain analysis can sometimes detect CoinJoin transactions
- Regulatory pressure is increasing on mixing services
Compared to Private Coins
Privacy coins like Monero and DERO have privacy built into the protocol. Bitcoin CoinJoin is an after-the-fact privacy addition that requires active participation.
Related Terms
Mixnet
A routing protocol that mixes messages from multiple users, making it extremely difficult to trace which input corresponds to which output. Mixnets provide stronger anonymity than onion routing by adding delays and shuffling.
Ring Signatures
A cryptographic technique that allows someone to sign a message on behalf of a group, making it impossible to determine which group member actually signed.
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