New Payjoin Bitcoin Mixing Service Creates Difficulties for Blockchain Tracking and Monitoring
Adam Gibson, the author of Waxwing’s Joinmarket blog wrote a new COinjoin concept that is called Payjoin. This protocol allows users to obfuscate UTXO’s ownership inputs during a transaction using Coinjoin’s mixing cycle.
Governments and law enforcement agencies have been trying to control blockchain networks, including Bitcoin (BTC) and other digital currencies. Indeed, governments have been funding companies that offer blockchain analysis services. Meanwhile, crypto privacy supporters have been working on new applications to make Bitcoin more fungible.
One of the methods to increase Bitcoin’s privacy is with a method that is known as Coinjoin. With it, several payments from several entities are combined in just a single transaction, making it difficult for blockchain experts to find out who the spenders are.
The Jooinmarket project uses the Coinjoin method to allow users to mix their coins and keep control over their private keys. People can also add liquidity to the market charging some fees. The Coinjoin uses multiple equal-value outputs that showcase an anonymity set. WIth several mixing rounds it is possible to create a larger anonymity set.
Gibson and its study show that there are several advantages in the Payjoin concept. The first one is that it hides the payment amount, which analysts consider as a mess. The second advantage breaks heuristics without flagging that breakage occurred.
Gibson explained about it:
“This is enormously important, even if the breakage of the assumption of common input ownership on its own seems rather trivial (especially if Payjoin is used by only a few people), with only two counterparties in each transaction.”
There are two more benefits. One of them is that Unspent Transaction Output sanitation. With Payjoin it is possible to bolster this action by consuming the UTXO of the last payment. Finally, the last advantage is making anonymity sets indistinguishable from ordinary payments.
There are several privacy coins in the market, including Monero (XMR), or ZCash (ZEC). Each of them uses different implementations for protecting users’ privacy. Just yesterday, Charlie Lee, Litecoin’s founder announced that they will be working on implementing Confidential Transactions (CT) to Litecoin (LTC). This would allow users to have enhanced privacy when transacting the popular digital asset.
Furthermore, Tron (TRX) is also working so as to implement ZK-Snarks. As per Charlie Lee, the final implementation will be ready to be released via a soft fork throughout this year.