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    Home Unlabelled Bitcoin Another CoinSwap milestone: Multi-hop CoinSwaps. Undetectable bitcoin privacy is being built

    Bitcoin Another CoinSwap milestone: Multi-hop CoinSwaps. Undetectable bitcoin privacy is being built

    February 27, 2021

    Bitcoin Another CoinSwap milestone: Multi-hop CoinSwaps. Undetectable bitcoin privacy is being built

    Another CoinSwap milestone: Multi-hop CoinSwaps. Undetectable bitcoin privacy is being built

    Posted: 17 Feb 2021 02:34 PM PST

    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, and recently reached another milestone: Multi-hop CoinSwaps.

    In the original CoinSwap design there would be only two peers involved, that meant if your wallet did a CoinSwap the other party knew exactly where your coins went. They were a single point of failure in privacy. Multi-hop CoinSwap is where the user routes their coins of multiple CoinSwap peers, and all of them need to collude in order to figure out the final source and destination of the coins.

    Just for fun I created a 5-hop CoinSwap on testnet. Each hop has 3 individual transactions:

    Taker's outgoing transactions:

    https://blockstream.info/testnet/tx/f45349bd279bea20b8b218300f8e2416abf28f3858470ad8c5eb2f6cd5ec10a9

    https://blockstream.info/testnet/tx/40ea5c9e478b66fa3f615c2b8d3accfd69308443d90a5353de669767cb02c51f

    https://blockstream.info/testnet/tx/8fe245e9c433127af4df8ff8853650808e3281fed7de6bfda62066a3fd3ad36e

    First maker funding transactions:

    https://blockstream.info/testnet/tx/3d9b879866ad136f9fe6e80599e1b97d610b6330be3ab4aa7df4161fce1e41d4,

    https://blockstream.info/testnet/tx/fa11e778d135be28b4e35498fc668c5aba7c70dcc43334b39e7488bd1259e8be,

    https://blockstream.info/testnet/tx/a7713452bab711c09be83a8c630fb91127771ed99cf15b528eacd28b00ba6b20,

    Second maker funding transactions:

    https://blockstream.info/testnet/tx/245e1e87d83a4bef06ceb8933c758137ee2f7ba7aa66800ebb7103707d5de5f7,

    https://blockstream.info/testnet/tx/15727b91e09a80634587f6210bdcba8808b93e4a780c55dd113ee85314db45c4,

    https://blockstream.info/testnet/tx/94e4e4e9e8fc2012158ed068145c8b883c295b37f5b3b6cba7a21c229d4da103,

    Third maker funding transactions:

    https://blockstream.info/testnet/tx/1384d58e534543e22e4f23a367728bff12177ee9af01b036c397cfca9bbe2eb8,

    https://blockstream.info/testnet/tx/eff3b1367f403c13927ddcb01c6d3c5c0d46076f7cb4419f8a18d6b62d884540,

    https://blockstream.info/testnet/tx/617c52caec2f7f17f3ebd1cab80233cdc1b414591f1cc49affbd828ffec10278,

    Fourth maker funding transactions (also taker's incoming transactions): https://blockstream.info/testnet/tx/8fde61974a4e0801ae5b76b620e2effd6c837310c1bd76d738216451ae1226e3,

    https://blockstream.info/testnet/tx/6491b85ef73a8f88e276a9b0f951c09e0367851a83aa49ffee8f8ad095f50de2,

    https://blockstream.info/testnet/tx/363b6803b7e3ed45472277448ce9938e3e73167a67762d6a9ac621243b8db019,

    These transactions don't look particularly special (which is the point), but they are CoinSwaps. Following the CoinSwap protocol, those coins are transferred off-chain to the next market maker. Even though the coin are unspent at the time of writing, they are unilaterally controlled by the other party.

    The user created a CoinSwap for 0.05 tBTC in this case (but it could have been any amount), and out the other side they got the same amount of coins (minus a fee) entirely disconnected to their initial coins. The fee goes to the makers which provides them an incentive to cooperate to improve privacy, and also gets spent on miner fees.

    From the point of view of someone just passively observing the blockchain, a single-hop CoinSwap is as private as a multi-hop CoinSwap, so I suspect in practice most users will just create 1-hop or 2-hop CoinSwaps.

    These example CoinSwaps have a visible 2-of-2 multisig address. But the plan is to later use a protocol called ECDSA-2P which allows us to create 2-of-2 multisig addresses that look the same as regular single-signature addresses. This allows CoinSwaps to blend in with the rest of the bitcoin transactions out there. Even the legacy p2pkh addresses starting with 1 can be CoinSwap addresses.

    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:

    submitted by /u/belcher_
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    The first Bitcoin reference in television history aired on The Good Wife in 2012, when it was only worth $3.41

    Posted: 26 Feb 2021 07:08 AM PST

    Spouses and Bitcoin

    Posted: 26 Feb 2021 05:32 PM PST

    I see a number of posts on here about people hiding bitcoin purchases from their spouse (married significant other). Or how people are upsetting their spouses with their bitcoin purchases.

    This is not a bitcoin issue. This a marriage issue.

    Take the time to work an intentional plan with your spouse. Set goals. Make a monthly budget. And decide what to do with your money together.

    Your financial life is much more than just bitcoin. And you and your spouse should be working as a team.

    If you disagree on allocation into bitcoin, talk about it. Set a plan where you achieve your financial goals together, and teach your spouse how bitcoin might be part of that. And be open minded enough to understand that your spouse has goals that are more than just stacking sats.

    submitted by /u/byb9069
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    Bitcoins ruins some lives #bitcoin

    Posted: 26 Feb 2021 05:21 PM PST

    Bloomberg Senior ETF Analyst: SEC Bitcoin ETF Approval Is Just Around the Corner

    Posted: 26 Feb 2021 09:02 PM PST

    "The United States can pay any debt it has because we can always print money." - Alan Greenspan, Chair of the federal reserve (1987-2006).

    Posted: 26 Feb 2021 04:31 PM PST

    The US economy explained

    Posted: 26 Feb 2021 07:43 AM PST

    Bitcoin is a Frankenstein's monster, stitched together and built using over 40 years of research and failed attempts. It was Satoshi Nakamoto who was brilliant enough to realize that prior attempts all failed due to their lack of running on a decentralized network. The rest is history.

    Posted: 26 Feb 2021 03:52 PM PST

    Made this in my high school animation class thought it would be a good reminder of not to panic sell!

    Posted: 26 Feb 2021 08:42 AM PST

    $1.9 Trillion Covid Relief Package Passed in USA House of Reps

    Posted: 26 Feb 2021 11:35 PM PST

    This is good for Bitcoin

    submitted by /u/Old_Rice3968
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    Don't even tell your parents you have bitcoin

    Posted: 26 Feb 2021 02:34 PM PST

    I have a very good relationship with my parents, but they're a bit nosy especially when it comes to finances. I told them about a small amount I had in bitcoin many years ago, but now that it's in the five figures they have gone and told other people, and pressure me every single phone call to sell.

    It's commonly repeated here to not tell anyone you have bitcoin, but you can trust your parents, right? Maybe you can, but their knowing will possibly change the dynamic of the relationship such that you no longer enjoy talking to them. Just don't risk it. Keep it secret.

    submitted by /u/CaptainOuzo
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    I’m not a smart man, but if you are never going to sell Bitcoin, why are you worried about today’s price?

    Posted: 26 Feb 2021 05:38 AM PST

    By the time you understand how Bitcoin works, it will be at a million dollars

    Posted: 26 Feb 2021 09:24 PM PST

    Satoshi soldiers, we have won, and we will never sell. As a community we buy daily in small amounts we add more stackers daily or weekly, and we buy once in a while in large amounts when you sell it to us. Because you haven't understood.

    Selling bitcoin is a meme that will disappear.

    We only buy bitcoin, forever. Number go up.

    HODL 96.86% of it and lock away the other 3.14% chasing the best yield. (currently BlockFi in the US but Celsius.network internationally right?)

    Proof of keys every Jan 3rd baby.

    Stack strong

    submitted by /u/veganbitcoin
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    Turn on your audio and enjoy xD

    Posted: 27 Feb 2021 12:42 AM PST

    A few hours ago /r/bitcoin hit 2.5 million subscribers! 500k new users within the last 48 days. Unbelievably awesome! Welcome, friends!

    Posted: 26 Feb 2021 05:43 AM PST

    The BBC is really pushing the anti-bitcoin agenda

    Posted: 26 Feb 2021 11:12 PM PST

    BBC News - How Bitcoin's vast energy use could burst its bubble https://www.bbc.co.uk/news/science-environment-56215787

    TL;DR: Don't worry you didn't buy bitcoin. It's really bad for the environment anyway and will soon crash!

    submitted by /u/DecentCity
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    Which one of you was this?

    Posted: 26 Feb 2021 11:31 AM PST

    Coinbase's declared $130 million in bitcoin holdings is the equivalent of only buying $100 worth of bitcoin per day since the company's inception.

    Posted: 26 Feb 2021 08:02 PM PST

    I got accepted to a job which pays in BTC!!

    Posted: 26 Feb 2021 09:22 AM PST

    Heyyy dear people I had to share this one for my community 🥴 I got accepted to a job which pays in BTC 😬 it's a costumer service at a Bitcoin Exchange in Tel Aviv right in the middle of this precious city. It's my extra job with 5 hours shift & they pay in BTC which I get to chose the percentage for cash or BTC, it's a life changing to me because I always invested with little money on crypto and never had the opportunity to invest bigger amounts 😕now I have this opportunity to keep 100% of my payment to BTC and start collecting those within time 😀😀😀 I'm obsessed with crypto and Love so much it's Idea and it's potential it has. so just wanted to share with you this one I had in kept in my stomach and wasn't sure if to publish it or not, but YOLO 😚😚 thanks for reading, hope everyone here will get paid in BTC !!

    submitted by /u/FireBangerIL
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    1.9 Trillion Stimulus Bill has been approve, $1400 Checks going to US Citizens �� The US Fed printing press will be going 24/7 Brrrrrrrrrr!!!!

    Posted: 27 Feb 2021 01:09 AM PST

    Mechanics of borrowing against bitcoin

    Posted: 26 Feb 2021 11:29 PM PST

    So now that Michael Saylor is our new god I have found myself in a couple of conversations about never selling, and borrowing against Bitcoin. A few things that people have been saying here don't seem to make sense to me, and I have got stuck in circular arguments with evangelists too many times not to seek further clarification.

    So I'd like someone who has actually done it explain some of the real world mechanics and advantages to me.

    Say I want to borrow $1 million to buy a house, a regular home loan needs to be paid monthly and you need to have an income that is sufficient to cover the repayments. Holding Bitcoin does nothing for you in this case unless you sell it.

    Putting some or all of your BTC up as collateral is the next step. But the loan repayments still need to be accounted for, so all I can hope for in this case by offering collateral, is to get a slightly lower interest rate? This also puts the BTC at risk if the price drops so extra collateral might be needed, or you face getting liquidated. Point is this is a risk that needs to be managed.

    I have been stuck in arguments with people who insist that the answer is to take out a second loan to pay off the first one but anyone with half a brain can see that at some point the loan needs to be repaid, and leveraging the hell out of everything you own is a great way to bankrupt yourself.

    From what I can tell, this idea of borrowing against your bitcoin is not the silver bullet to tapping into this huge source of money that people seem to think it is. The only people able to do that are ones who already have a large enough income to service the loan to begin with.

    If you find yourself in a position where you're holding a life changing amount of BTC then I cannot see a way of capitalising on it in full without selling at least some of it.

    What am I missing here? Please educate me before I get capital gain taxed to death!

    submitted by /u/Reedey
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    The Cycle Continues

    Posted: 26 Feb 2021 04:59 PM PST

    MicroStrategy CEO says bitcoin will one day have $100 trillion market value even as price dives. #cryptocurrency

    Posted: 26 Feb 2021 07:25 AM PST

    Never ever try to time the market

    Posted: 26 Feb 2021 02:51 PM PST

    This has been my advice to everyone since I had my first bitcoin. The past week I tried to time the market once. IDIOT. Lost a lot. Im so I tried to recuperate what I lost by trying to act smart again. IDIOT AGAIN. I gave in to the fact that I have two balls and none of them is crystal. Don't try to time the market. Hold and only sell if it's very very important.

    Edit: seriously??? Six DM's in 10 minutes??? Fuck off scammers.

    submitted by /u/boostank
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    GOT THE FAM A WHOLE COIN

    Posted: 26 Feb 2021 12:09 PM PST

    Man I'm so psyched it's working out so far, I want to shout it from the mountaintops how happy I am to have gotten a whole coin for my family but don't want to talk about it with friends and come off as braggy.....figured this would be a good place to share :D

    HODL ON BROTHERS

    submitted by /u/Ds7592
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