Bitcoin Privacy Tool 'CoinShuffle' Completes First Transaction!

Rage Review : Bitcoin privacy tool 'CoinShuffle' is a privacy technology that protects users' sensitive information on the public chain without a third party. Bitcoin wallet service provider Mycelium is the sponsor of the project. However, if you want to take this technology further, you need to study a registration system that allows users to easily connect with other users, allowing different transactions to join in, so as to achieve the purpose of confusing the source of transactions and realize transaction anonymity.

Translation: Nicole

The anonymous transactions long awaited by Bitcoin enthusiasts have finally been successfully tested on the network!

The transaction sent to the bitcoin testnet earlier this month was the first transaction to be made on the network using CoinShuffle, a proposal that sparked interest when it was first introduced in April 2014 as a privacy technology that does not rely on a third party.

But on August 15, developer Daniel Krawisz used the Bitcoin tool to send what he considered to be the first transaction of its kind. (This type of transaction had been implemented on the NXT blockchain platform before.)

The technology is meant to protect sensitive user information that would otherwise be visible on the public Bitcoin blockchain, but the short-term goal is to integrate the technology into Bitcoin wallet service provider Mycelium, which was launched in 2013 and is a sponsor of the project. Mycelium recently released a roadmap for the development of the CoinShuffle technology "Phase 5," or the final step.

Krawisz has been working on an implementation of Mycelium’s CoinShuffle technology since late last year. He named the project Shufflepuff in an effort to reduce the notoriety that bitcoin’s anonymity technology has received, as some bad actors have abused the technology for illicit activities.

Daniel Krawisz

Krawisz told CoinDesk:

“CoinShuffle is open source and I hope that eventually more wallet providers will use it.”

The tool is now available for everyone to experiment with and runs on everyone’s computer, but so far there is no way to aggregate wallet users and “join” their transactions or mix them together to anonymize them.

Therefore, adventurous users need to discover other participants' "joining" through their devices. Another thing to note is that Shufflepuff is still an alpha testing software, so Krawisz does not recommend users to send too much funds on it.

Technical Details

Researchers at the University of Saarbrücken proposed CoinShuffle, an implementation of CoinJoin that mixes multiple transactions, thereby obfuscating the specific details of each transaction.

Bitcoin developer Greg Maxwell invented CoinShuffle in 2013, inspiring the Dark Wallet, Dash, NXT, and JoinMarket applications. But CoinShuffle is different because it uses CoinJoin to mix transactions without a third party, thus achieving trustlessness.

Shufflepuff is a real-world implementation of CoinShuffle written in the Java programming language.

There are other privacy-focused Bitcoin technologies and projects, such as Confidential Transactions and other cryptocurrencies like Zcash, but CoinJoin does not require changes to the Bitcoin protocol, which means it can make privacy easier to implement. Because protocols that require extensive changes will take longer to test and implement.

Its working principle is to combine two or more transaction outputs and inputs into one. (Even the transaction recipient will not know the source of the transaction address).

But some transactions are problematic in the eyes of those who support decentralization.

Because mixing transactions means mixing with other transactions, many applications require a third party to execute the transaction. Some people believe this jeopardizes privacy and control of funds, which is exactly what Shufflepuff wants to solve.

Looking ahead

Although the first transaction has been completed, there is still a long way to go in the future.

Because joining a transaction requires gathering other users, Krawisz is currently working on a registration system that allows users to easily connect with other users. He hopes that more developers can participate.

Additionally, he wants more support for end-to-end encryption, which could further protect transactions.

Krawisz argued that wallets and other service providers are free to choose the open source project, but how these services are ultimately integrated into Shufflepuff will affect the level of privacy.

He also outlined possible models for even stronger anonymity in Mycelium.

Finally, Krawisz called on others to join the project and write Shufflepuff in other programming languages ​​so that other wallets and service providers can use Shufflepuff.