Shuffling Coins to Protect Privacy and Fungibility: A New Take on Traditional Mixing

Is it possible for you to mix your Bitcoins with other people’s Bitcoins, and at the same time profit from it? Mixing companies claim it is - but there is a risk. Privacy is not just for criminals. Many people think that mixing services are primarily used to launder Bitcoins obtained through fraudulent or illegal means. This is not necessarily the case. Privacy is important for everybody. Criminals should not know how wealthy you are, strangers should not be aware of how you spend your money. This is a reason why Bitcoin mixers - Eg. Bitmixer.io - have grown their businesses. Trust is an....

Following the U.S. government prohibiting the use of the ethereum mixing service Tornado Cash, the crypto economy’s top privacy coins lost more than 8% in USD value the following evening after the ban announcement. The top privacy coins like monero and zcash managed to recover the losses two days later, but during the last 24 hours, the top privacy coins by market capitalization today are around $6.44 billion, down 3% from the day prior. While the Top Privacy Coins Have Seen Some Recovery, Most Took a Market Beating Last Week When OFAC Sanctioned the Crypto Mixing Service....

An innovation called TumbleBit that improves the privacy and fungibility of bitcoin transactions was presented at the Bitcoin Scaling conference in Milan, reports NASDAQ. TumbleBit builds on the CoinSwap intermediary solution with added layers of cryptography to improve both the privacy and fungibility of bitcoin transactions. The fact that the transaction history of each bitcoin is traceable puts all bitcoins’ fungibility at risk. “Tainted” bitcoins can be valued less than other bitcoins, possibly undermining bitcoin’s value proposition as money. A key problem for fungibility and privacy....

A slimming down of the bitcoin protocol called Mimblewimble generates a blinding factor that can prove ownership of bitcoins, making private keys unnecessary, and offering a solution to the need to balance bitcoin privacy against fungibility while also improving scalability, according to a white paper that appeared mysteriously on a bitcoin research site authored by a person using a pseudonym, according to Nasdaq. Privacy and fungibility are at odds in bitcoin because anyone can trace transactions over the blockchain, and as the number of transactions increases, the verification cost can....

Bitcoin right now is not really anonymous. Monitoring the unencrypted peer-to-peer network, analyzing the public blockchain or Know Your Customer (KYC) policies and Anti-Money Laundering (AML) regulations can reveal a lot about who is using Bitcoin and for what. This is not great from a privacy perspective. For example, Bitcoin users might not necessarily want the world to know where they spend their money, what they earn or how much they own; similarly, businesses may not want to leak transaction details to competitors. Additionally, the fact that the transaction history of each bitcoin....