(CoinJoin*, god damn autocorrect)
Earlier this week, a Bitcoin mixing service cleverly named bestmixer.io was seized by the Dutch authorities on the grounds of money laundering. Apparently, BestMixer was openly advertising itself as a safe haven for criminals with "tainted" UTXOs. Certainly not the best strategy if you're looking to lay low in the eyes of the law and stay in business for very long.
In the wake of the news, some confusion spread as some outlets reported that the technique used by BestMixer is similar to the popular on-chain UTXO mixing technique known as CoinJoin. Services like Wasabi, Samourai, and JoinMarket utilize CoinJoins to help their users transact more privately on the Bitcoin network. This works by aggregating a number of payments from many users and creating outputs of equal value to send back to each user, which helps obscure your UTXO path within the network. This blows up a lot of the heuristics used by chain analysis companies who aim to make Bitcoin users as trackable as possible.
However, this is fundamentally different than the BestMixers of the world who simply act as a central redistributor of UTXOs. Essentially facilitating the trade of UTXOs among users in a centralized fashion without the need for constructing special transactions. This may not seem like a big difference to the layman, but it is a big difference that should be highlighted and stressed lest we allow the State to conflate the two in an attempt to stifle Bitcoin privacy. Centralized services openly marketing to criminals are not the same as wallets that construct specifically designed Bitcoin transactions providing better privacy for their (what should be assumed) innocent users.
The right to transact privately is a God-given human right that should be guarded at all costs. As Bitcoiners, it is important that we fight for our right to CoinJoin. And don't be naive, there will be a fight to preserve the privacy-enabling features of Bitcoin. The State will cry "money laundering! terrorists! think of the children! taxes!" until it is blue in the face in an attempt to fear monger the masses into a culture of full transparency and self-censorship. The onus will be on us to sack up and fight for this right.
The beauty of the Bitcoin Network is that it's permissionless and the ability to CoinJoin exists today. Recently, the total percentage of transactions involved in some sort of CoinJoin on the network hit more than 4%. Very promising, but these are rookie numbers. If we are going to attain an acceptable privacy assurance we're going to need to pump these stats. We have to make it so CoinJoin'ing an accepted norm.
Luckily, companies like Bull Bitcoin are leading the way in this department. Automatically CoinJoin'ing clients' funds when they hit their platform. On top of this, the first proposal to implement Schnorr signatures has been proposed. If and when Schnorr is implemented, CoinJoins may be highly incentivized due to the fee benefits that come with using one signature to send multiple transactions. Privacy loves company and Schnorr signatures would incentivize company in CoinJoin rounds.
As always, we'll be following the developments of the fight on Bitcoin privacy here at the Ƀent and will work hard to keep you abreast of the best privacy tools on the market.
Go forward! CoinJoin!
Ms. Falkenstein also had one of those student-teachers from a local college who came to get class credit by practice teaching to 5th graders. I forget his name, but he only lasted two weeks. He worked at the local GameStop though, so I saw him pretty often.