Bitcoin Privacy: 5 Projects to Enhance Bitcoin Privacy

ٍSince the creation of Bitcoin has never really been private but Satoshi Nakamoto's white paper suggests privacy was a design goal of the original protocol.

So in this article I will give you 5 most promising projects that will enhance bitcoins privacy A lack of privacy is a problem Bitcoin users might not necessarily want a world to know where they spend their money what they earn and how much they own while businesses may not want to lick transactions details so competitors and to the public in general let me give you an example let's take publicly traded company like Apple by the way guys this company is the first company in history to reach one trillion dollars market cap Congrats to Apple I guess let's say Apple adopts Bitcoin payment system now you can buy iPhones with Bitcoin it would be cool wouldn't it however here is a big problem Bitcoin payment system is conducted in the publicly open ledger that anyone can see all transactions and all sales that Apple making using Bitcoin now in this information you will be able to know how much money Apple makes every day every week and every month and so on and on yes yes but you may probably ask yourself why Apple should give a well here is why prior to the quarterly release of the company's earning if you know how much company already made then you will help what so called inside information and you can bet on the stock price to go up or down given that you already know what earnings to expect so every publicly traded company must contain their earnings private the further earnings quarterly announcements therefore currently no publicly traded company is willing to fully accept Bitcoin because of the privacy reasons another example why we want privacy is function et a lack of privacy could lead to a loss of function et tangibility means dollar in your pocket has the same value as a dollar in my pocket which is an essential requirements for money even though US dollar is their money it just contains few properties of money going back to Apple example if there is a political incentive to manipulate Bitcoin then Bitcoin might be less accepted as payment and it will harm functionality for all Bitcoin users fortunately enough Bitcoin technology rapidly evolves and it becomes more difficult to spy on Bitcoin users there is a number of promising privacy enhancement technologies and several more solutions should be released throughout the rest of the next year here is an overview of 5 most promising projects

1. Tumblebit

Almost two years in the making Tumblebit was along among the most highly anticipated privacy solutions to be rolled out on Bitcoin Tumblebit is a coin mixing protocol that uses Tumblr to create obtain payments channels between participants in the mixing session through these channels all participants and coins and receive an equal amount of different coins in return this process breaks the trace of ownership for all needed spies nor any other participants can reestablish who paid who further and importantly Tumblebit utilizes clever cryptography tricks to ensure that even Tumblr cannot establish the link between the users

2. Conjoin and Zerolink

Conjoin is an old idea for Bitcoin first proposed by Bitcoin contributor Gregory Maxwell in 2013, in essence, the trick is to combine several transactions into one big transaction hiding Kovitch bitcoins are moving from which sending addresses to which receiving addresses exactly let me give you quick example let's say Alice Bob and Carol all want to mix their coins with each other using Coinjoin they can create a transaction that sends money back to themselves using new addresses not side to their identities as long as Alice Bob and Carol use equal amount of coins spies cannot tell which of the new addresses belong to whom

3. Schnorr Signatures

While conjoined was already possible and first proposed years ago it's never been embraced by developers so far for a long time no popular wallet offered this feature which may be because Coinjoin transactions add complexity with little upside for those who do not really care about privacy Schnorr signatures was developed by black stream developer who recently it was named after inventor Klaus-peter Schnorr Schnorr signatures to be considered by many cryptographers to be the best type of cryptographic signatures in the field perhaps the biggest concrete advantage for Bitcoin is that multiple signatures can be aggregated into a single signature this means that signature can prove ownership of multiple sending addresses therefore only one signature is ever needed pair regular transactions no matter how many sending addresses are you included with Schnorr signatures they'll be a cost benefit to use the most private option which may just provide the right incentive for wallets to implement it and make it go to option for everyone

4. StoneWall

Another Coinjoin related privacy measures were introduced in May 2008 seen as a replacement for a similar but inferior solution called stonewall the trick does not actually utilizes coin joy but make it seems like it does stonewall transactions are in fact regular transactions they send Bitcoin from one user to another, however, stonewall transactions do something odd they include a necessary number of sending addresses and change addresses this makes the transactions look like coin joint transaction a transactions rates of people combining the transactions into one transaction even though in reality it isn't

5. Dandelion

A very different method for Bitcoin users is to through analysis peer-to-peer network most specifically spying nodes could monitor a Bitcoin network to try to find out where transactions originated the first node transmitted transactions is probably the one that created the deadline is a solution proposed by the team from MIT researchers the solution counters the network analysis by changing how transactions are spread over the peer-to-peer network instead of immediate broadcasting and forwarding new transactions to as many pairs as possible the deadlines protocol initially sends in new transactions to only one pair node this node randomly decides whether it also forwards it's only one pair or not if forward it's only one period then the next period will randomly decide whether to do it as well and so on and on this should make it significantly harder for spies to pinpoint where transaction was originated

So this is the end let me know what you think about Bitcoin and those privacy projects do you think bitcoin should be more private or not leave your thoughts in the comment section below