CoinJoin - Reading Assignment

Privacy Coins - Ultimate Course
#63

  1. What is the benefit of CoinJoin over BitLaundry, if any?
    Transaction going through BitLaundry will be easily identified.CoinJoin Transactions are indistinguishable from transactions created through conventional use.

  2. About halfway down, Maxwell writes: “failure (retry) risk mean that really huge joint transactions would not be wise.” Explain failure (retry) risk.
    Either DOS attacks could cause it or one of the members is not willing or cant sign the transaction.

  3. How can anonymity set be increased while keeping small transaction sizes?
    Just increase the number of transactions within a specific process.

  4. What is the main benefit of CoinJoin over Zerocoin?
    You don’t need a soft fork of bitcoin to use the CoinJoin functionality

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#64

There seems to be more of a mutual agreement with using CoinJoin as the users come to a consensus on inputs and outputs, whereas BitLaundry is a centralized service in which you trust them. CoinJoin is also Decentralized, they just provide the platform.

There is a risk due to the fact that to have a large transaction you would need a lot of people, and if one of them doesn’t want to sign, then you failed and have to retry.

The transactions are cheap, and therefore more transactions would happen. The more users the more anonymity.

CoinJoin doesn’t force a soft fork.

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#65
  1. What is the benefit of CoinJoin over BitLaundry, if any?

CoinJoin allows a number of different entities to form a single transaction that mixes all their coins/UTXOs among themselves. All would sign the transaction, and then the transaction could be transmitted. No risk of theft at any point.

  1. About halfway down, Maxwell writes: “failure (retry) risk mean that really huge joint transactions would not be wise.” Explain failure (retry) risk.

If all the signatures don’t come in within some time limit, or a conflicting transaction is created, CoinJoin system could simply leave the bad parties (blacklist that input from further rounds) and try again. With an automated process any retries would be invisible to the user.

  1. How can anonymity set be increased while keeping small transaction sizes?

The anonymity set size of a single transaction is limited by the number of parties in it and therefore really huge joint transactions are not advisable. But because these transactions are cheap, anonymity set can be any size by increasing the number of cascading sequence of transactions, limited only by participation.

  1. What is the main benefit of CoinJoin over Zerocoin?

While Zerocoin has many privacy advantages over CoinJoin service, Zerocoin requires a soft-forking change to the Bitcoin protocol, which all full nodes must adopt, which would commit Bitcoin to a particular version of the Zerocoin protocol. On the other hand CoinJoin transactions work today, and they’ve worked since the first day of Bitcoin. They are indistinguishable from normal transactions and thus cannot be blocked or inhibited except to the extent that any other Bitcoin transaction could be blocked.

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#66
  1. BitLaundry is centralized. If incase, data breach possible. Input and output match might reveal sender and receiver. Whereas, CoinJoin is decentralized. P2P agrees on input and output TXNs values independently, signs individually to later conduct the consolidated into 1 TXNs with similar outputs. Harder to connect sender and receiver if done properly.
  2. If a participant in the TXN fails to sign deliberately / for any other reasons, then all the other participants are at risk.
  3. By increasing the number of TXNs.
  4. Bitcoin soft fork not required. Less computation power required. No disputes in the community.
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#67
  1. What is the benefit of CoinJoin over BitLaundry, if any?
    BitLaundry was a centralized service where you sent your transaction amount request to them, waited for them to coordinate a transaction with the amount you requested to your intended recipient. CoinJoin just needs users to agree on a set of inputs to spend and a set of outputs to pay, and then to individually and separately sign a transaction and later merge their signatures.
  2. About halfway down, Maxwell writes: “failure (retry) risk mean that really huge joint transactions could not be wise.” Explain failure (rety) risk.
    Failure Risk is when one party doesn’t want to sign a transaction as valid. Meaning the individual making the transaction would have to retry again
  3. How can anonymity set be increased while keeping small transaction sizes?
    Because the transactions are cheap when using the CoinJoin method, there is no limit to the number of transactions you can cascade.
  4. What is the main benefit of CoinJoin over Zerocoin?
    You don’t have to soft-fork the bitcoin protocol as compared to the Zerocoin Protocol.
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#68
  • What is the benefit of CoinJoin over BitLaundry, if any?
    BitLaundry is centralized service therefore you need to trust them to do what they say they’ll do.
  • About halfway down, Maxwell writes: “failure (retry) risk mean that really huge joint transactions would not be wise.” Explain failure (retry) risk.
    It means that one party could start not signing the transaction and therefore halt the system.
  • How can anonymity set be increased while keeping small transaction sizes?
    By increasing number of transactions.
  • What is the main benefit of CoinJoin over Zerocoin?
    CoinJoin already works on Bitcoin and Zerocoin would require soft fork
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#69

1.The benefit of CoinJoin over BitLaundry is that BitLaundry is centralised and involves a third party, whereas with CoinJoin the users validate the inputs and outputs themselves.

2.Failure (retry) risk is when something happens to prevent a user from signing a transaction as valid within a time limit, causing the other users to try again without them. The more users involved, the more chance there is of a mistake happening, or a bad user being present, so the more likely it is that the transaction will fail. Clearly, a huge transaction has a high likelihood of failure, so is unwise.

3.The anonymity set of a single transaction is limited by the number of users in that transaction, but because transaction costs are cheap, these transactions can be cascaded (repeated in several stages), thereby multiplying the number of inputs and outputs, and as a consequence, multiply the number of possible original senders - increasing the anonymity set.

4.The main benefit of CoinJoin over ZeroCoin is that CoinJoin already works while ZeroCoin would require a soft fork to be implemented.

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#70
  1. CoinJoin does not require trust. All parties create transaction and sign it later in a decentralized way. BitLaundry has a fee as a centralized service. CoinJoin does not have any other fee than a Bitcoin network charges.
  2. The risk is if one of the participants involved in CoinJoin transaction creation refuses to sign it eventually. All other participants will simply waste their time in this case. The more participants included in the transaction the more risk is that one of them will refuse to sign it later and transaction won’t happen.
  3. Maxwell suggests to create sequence of transactions in order to increase anonymity set. Frankly, not sure how is it supposed to work in practice.
  4. The main benefit is that CoinJoin transactions work now and were possible since inception of Bitcoin while Zerocoin protocol would require soft-forking change to the Bitcoin protocol and commit Bitcoin to a specific version of Zerocoin protocol which was not well established.
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#71
  1. BitLaundry was somewhat more centralized and defeated the decentralized purpose of bitcoin and blockchain. CoinJoin on the other hand remains decentralized. It only requires individually signed transactions on an agreed upon number of inputs and outputs.
    2.This risk is the vulnerability in the case of DOS attack or one of the members in the transaction failing to sign.
  2. If CoinJoin’s number of transactions increase.
  3. Zerocoin would require a soft fork to be implemented.
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#72
  1. it could do joint payment together
  2. failure(retry) risk means the chances of unsuccessful transaction
  3. by joining some small transaction
  4. CoinJoin works today and has been there since the start of Bitcoin, it has no fork
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#73

  1. What is the benefit of CoinJoin over BitLaundry, if any?
    CoinJoin only needs multiple parties to agree on input and output amounts. It is similar to BitLaundry in that it functions better with larger scale. BitLaundry was centralized and had the extra counterparty risk

  2. About halfway down, Maxwell writes: “failure (retry) risk mean that really huge joint transactions would not be wise.” Explain failure (retry) risk.
    This occurs when a party member in the transaction does not authorize the transaction as valid, requiring the transaction to retry again.

  3. How can anonymity set be increased while keeping small transaction sizes?
    This is the efficacy through scale. You have more transactions and parties - there is not limitation on the number of transactions combined.

  4. What is the main benefit of CoinJoin over Zerocoin?
    Coinjoin functions on Bitcoin without requiring any fork to the structure or protocol. Zerocoin has technical aspects that are heavier.

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#74
  1. CoinJoin is decentralized and therefore trustless. It does not come with a fee and the danger of violated trust as in BitLaundry.
  2. The failure risk arises from one or more participants not signing the transactions.
  3. He suggests to create a sequence of transactions that form a 3-stage switching network.
  4. Zerocoin would require a soft fork while CoinJoin does not.
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#75

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#76

1. What is the benefit of CoinJoin over BitLaundry, if any?
BitLaundry is a centralized service, where as CoinJoin is decentralized and is dependent on users agreeing on inputs and outputs . Tx’s that rely on BitLaundry can be recognized, whereas CJ tx’s “externally indistinguishable from a transaction created through conventional use”,

2. About halfway down, Maxwell writes: “failure (retry) risk mean that really huge joint transactions would not be wise.” Explain failure (retry) risk.
One or more parties could refuse or forget to sign and prevent the whole tx from going through.
But I’m not sure why it would be unwise - could someone please clarify? Would this leave some sort of additional footprint or would it just be inconvenient?

3. How can anonymity set be increased while keeping small transaction sizes?
This can be done through increasing the amount of tx’s by creating a sequence of tx’s.

4. What is the main benefit of CoinJoin over Zerocoin?
Coinjoin can use existing protocol, whilst Zerocoin requires a soft fork.

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#77
  1. Users have control of balances, no need for third party.
  2. Someone doesn’t sign the huge transaction, or possible DOS attack.
  3. Increasing the number of participants, who are doing a lot of smaller transactions.
  4. CoinJoin doesn’t require soft fork.
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#78

If it’s running on a centralized server, there’s just more data created that has to be erased… but otherwise yeah just a headache.

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#79
  1. What is the benefit of CoinJoin over BitLaundry, if any?

Bitlaundry is a centralized entity while CoinJoin is a decentralized.

  1. About halfway down, Maxwell writes: “failure (retry) risk mean that really huge joint transactions would not be wise.” Explain failure (retry) risk.

The risk of some participants “going down” during the proccess of Coinjoin or the possibility of DOS attack.

  1. How can anonymity set be increased while keeping small transaction sizes?

By increasing the number of transactions of the Coinjoin proccess.

  1. What is the main benefit of CoinJoin over Zerocoin?

No soft fork required.

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#80
  1. CoinJoin needs users to agree on a set of inputs to spend and a set of outputs to pay, and then to individually and separately sign a transaction and later merge their signatures.
  2. Failure risk is related to the risk that the CoinJoin transaction fails, either because of a DOS attack or because a member of the transaction is not able/willing to perform its part of signature. It is an increased risk when it comes to huge transactions because it would put at risk all other parties involved.
  3. By increasing the number of small transactions.
  4. CoinJoin doesn’t require soft fork.
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#81

What is CoinJoin’s benefit over BitLaundry, if any?
The main benefit is their lack of trust, since they don’t have the need to trust a third party.

Halfway through, Maxwell writes: “The risk of failure (retry) means that really large joint transactions would be reckless.” Explain the risk of failure (retry).
Stop other users from signing joined transactions or a DDOS attack

How can anonymity be increased by keeping small transaction sizes?
Multiple transaction cascades.

What is CoinJoin’s main benefit over Zerocoin?
Coin Join doesn’t have to soft-fork the bitcoin protocol.

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#82

  1. CoinJoin is decentralised and based on consensus. multiple users have to agree on a set of inputs and outputs to spend and pay and individually sign the transactions which later are being merge.

  2. The risks are the possibility of a DOS attack or the case if a user fail to sign.

  3. By increasing the number of the transactions.

  4. CoinJoin does not need a Soft Fork.