bitcoin-dev

Design for a CoinSwap implementation for massively improving Bitcoin privacy and fungibility

Design for a CoinSwap implementation for massively improving Bitcoin privacy and fungibility

Original Postby Mr. Lee Chiffre

Posted on: June 10, 2020 00:43 UTC

The concern over scalability and privacy in Bitcoin is discussed in a message sent to Chris from Lee Chiffre.

The large transaction size required for acceptable privacy on a distributed financial network is a problem shared by both Bitcoin and Monero. Transactions with similar privacy properties are at least equally as large as Monero transactions, and coinswaps must take place after every transaction to maintain privacy and unlinkability from other bitcoin transactions. CoinSwap is considered a much-needed development to swap coins with others in a trustless way that is not linkable to the public blockchain. However, combining multi-transaction with routing is proposed to get the benefits of both, with multiple UTXOs owned by Alice and various amounts of BTC being transferred to Bob, Charlie, and Dennis, before returning to Alice. This proposal would create scalability issues due to multiple branches and layers.