Currently, there are still many risks associated with the utilization of Bitcoin-related resources by people interested in these products. In regard to this problem, the group of Bitcoin fans and scientists engaged in the study of this trend has already offered a number of options to increase confidence and loyalty through the intended prevention of these risks. Here is the description of some vital mixing operating procedures that should be considered by everyone engaged in the investigation of ways to elude disclosure and successfully deal with relevant funding operations.
Decentralized
Decentralized mixing protocols are aimed at keeping away from the involvement of a mediator. Getting much satisfaction from the above-mentioned type of technology, it is necessary to point out to interoperability of input and output variables to achieve a lack of linkage. In the large number of these mixing methods, the focus on decentralization allows consumers to detect other members (the so-called bootstrapping technique). As a rule, decentralized protocols have two weak points, namely, certain constraints in scalability and much time spent waiting to identify the necessary mixing peers.
CoinJoin technology
CoinJoin represents another option for the initiation of multiple transactions, which come from several transmitters to be united into a single unit. It is rather challenging for external sources to detect the relevant receiver of every input without the proper correction of the existing Bitcoin deal. Starting from the time of Bitcoin’s creation, this method has been widely accepted as the option that makes any inputs of the deal being owned by the same person. Anyway, CoinJoin deals show that this is not true all the time. Consumers are able to work collaboratively to detect a uniform output amount of 12 and blend their deals into a single one. One after the other, those who send funds encounter a low level of fees for their deals and minimize the large number of operations on the Bitcoin platform.
CoinShuffle technology
This type of technology does not need any mediator. It fits the current Bitcoin platform and utilizes CoinJoin to perform deals. It is critical to understand the fact that in the relevant Section, the so-called bootstrapping tool for consumers is defined as a nondeterministic goal. It suggests that any consumer of the proposed service enjoys security due to a decentralized option to show their intention to take part in these activities. CoinShuffle requires implementation based on three stages: Announcement Stage, Shuffling Stage, and Transaction Verification Stage.
- The illustration of the CoinShuffle’s viewpoint points to a high degree.
- In the Announcement Stage, every member creates a temporary key pair to encrypt and decrypt data and shares the necessary keys for encryption.
- In the Shuffling stage, the members start by producing a newly developed Bitcoin address, which plays the role of their main output 14 address.
- Further on, the members start to initiate shuffling of the obtained output addresses with the help of a technique that resembles a decryption mix net operation.
- In this stage, the output is represented in the form of a set of output addresses shuffled by the members.
- This leads to the eradication of any linkage between inputs and outputs.
- In the third stage, known as Transaction Verification, the members can check out the availability of their newly designed output address in the final list that contains all output addresses.
In case of a positive result, a CoinJoin deal is generated, incorporating both the inputs and the relevant outputs. Everyone should provide signing of the deal and ensure its broadcasting to others. The lack of a signature leads to the wrong act of a Bitcoin deal. As soon as the required signatures are available to the full extent, the transactions are immediately directed to the Bitcoin platform. The utilization of the CoinJoin method gives an opportunity to divide the fees for electronic payment procedures between all members engaged in this activity. Everyone enjoys the benefit of having lower fees and the lack of mixed fees.
Moreover, in case a member needs to initiate a change deal, he/she can add a certain change address to the list that contains all output addresses. So, CoinShuffle represents a powerful decentralized mechanism based on the adoption of the appropriate operations for enhanced communication between consumers. Thanks to these methods, the introduction of a centralized, unreliable control system is not entirely excluded.
