Anonymity and confidential transactions. Blockchain.info disabling anonymous transactions. Cryptocurrency mixing as a CoinJoin-like anonymisation method. Serverless peer-to-peer software. Vulnerabilities to statistical analysis. Soft fork upgrade with confidential transactions after Segregated Witness.
Transcript
[AUDIENCE] Hey. On the subject of wallet security and privacy, Blockchain.info was very innovative... and has been around for a long time, kind of a pioneer in the architecture of client-side wallets. They also had a CoinJoin feature for multiple years.
It was a simple checkbox: 'do you want your transaction to be anonymous?' They disabled that a couple months ago. [ANDREAS] I think so, I am not sure. [AUDIENCE] I was wondering if you had any insight on why they did that. It may be a technical reason...
that I am not aware of. [ANDREAS] I have no insight or ability to comment. It is a private company and I have no association. Obviously, it would be disappointing because that was a feature that the lot of people found useful.
On the other hand, there is a big difference between [the Bitcoin space] in 2013 to 2014, where [their wallet] was the only option [for using CoinJoins], versus [the options we have today]. If you want to use CoinJoin, the easiest way to do it is with ShapeShift, [swapping] from Bitcoin, to Dash, to Monero, to Zcash, and [back through again]. Maybe a bit of Litecoin or ether in there, for fun. [Laughter] Or some Classic.
Mix it all up. When you are back in bitcoin, you have [effectively] coin-joined. You don't really need it as an application. You can use it [through cross-chain swaps].
That is part of what the ecosystem offers us now, many alternatives. There is also a peer-to-peer network, I think it is called Join Market, if someone might correct me. It is peer-to-peer server-less software. It essentially does the same thing, in a broadly applicable way.
The main weakness with CoinJoin, privacy and anonymization technologies is that you could... [perform] statistical analysis on the values, and correlate associations with that. That is what confidential transactions [solves] directly, which is really good. [AUDIENCE] What are confidential transactions?
[ANDREAS] Confidential transactions are... implementation of homomorphic encryption using ring signatures, as best as I can understand it. They are running as a testbed on the Elements alpha-version sidechain run by Blockstream. It was initiated by Gregory Maxwell and Pieter Wuille; a bunch of other developers are working on it today.
It is one of the [upgrades] proposed as a soft fork after Segregated Witness, to bring it straight into Bitcoin.