3.10 CoinJoin: Group Transactions for Privacy
Collaborative transactions that break the common-input heuristic.
CoinJoin: Group Transactions for Privacy
A CoinJoin is a transaction where many strangers contribute inputs and receive equal-sized outputs in return. To outside observers, it becomes impossible to tell which output belongs to which person — like everyone putting a dollar bill in a hat and pulling one back out.
A CoinJoin is a transaction where many strangers contribute inputs and receive equal-sized outputs in return. To outside observers, it becomes impossible to tell which output belongs to which person — like everyone putting a dollar bill in a hat and pulling one back out.
This directly breaks the 'common-input ownership' assumption that chain analysis relies on. Software like Wasabi (using a protocol called WabiSabi) and JoinMarket coordinate these group transactions automatically; you just press a button and your coins are mixed with dozens of others.
CoinJoin doesn't make Bitcoin anonymous like cash. But it dramatically raises the cost and uncertainty of tracking you, which for most users is the whole point. Done regularly with reasonable care, your coin history becomes much harder to follow.
Note: some exchanges will flag deposits coming straight from a CoinJoin. Plan ahead — many privacy users let coins sit in a fresh wallet for a while after mixing before moving them to a KYC service.