More Bitcoin than ever was just made private with this technique

More Bitcoin than ever was made private this month via an anonymization strategy known as CoinJoin. And if you own Bitcoin, but use centralized exchanges or other similar services, privacy experts say you should probably consider this too.

Bitcoin mixers using the CoinJoin technique, such as Wasabi and Samurai Wallet, have seen tremendous growth in recent months, according to open source data shared by Wasabi contributor and educator Max Hillebrand.

Non-custody wallets (i.e. wallets that allow users to manage the private keys of their own money) such as Wasabi and Samourai allow users to use their Bitcoin by paying a small fee to have their Bitcoin mixed with others to share their transaction history and links to identities.

According to the data, about 70,000 BTC (about $ 644 million at current prices) was made private in May. This cumulative total may vary slightly for “false positives,” since a type of CoinJoin called JoinMarket is difficult to track, Hillebrand said. “I’m pretty sure the figures for Wasabi and Samourai are correct,” he said Decrypt.

While the total number is impressive, ‘Fresh Bitcoins CoinJoined’, or coins that were first mixed, are also emerging after a peak last year. “The more colleagues use CoinJoin, the higher the anonymity,” he said. “So the higher the overall privacy.”

The growth in CoinJoins is because Bitcoin privacy experts said earlier this week that such practices could have helped the data breach suffered by crypto credit company BlockFi.

BlockFi users on Tuesday learned that hackers were using a SIM swap attack to access their personal information, including Bitcoin addresses. The leak may have compromised users’ transaction history, which could allow hackers to track how many Bitcoin users own and how they connect to other addresses.

Veiled funds through CoinJoins could have severed these connections, according to privacy experts such as Matt Odell. But BlockFi does not allow its users to deposit CoinJoined funds due to regulatory issues.

Like Odell, Francis Poulliot, CEO of Bull Bitcoin advocates for Bitcoiners to CoinJoin their exchange purchases, also from his own company.

Hillebrand and his community of open-source developers are working to convince more bitcoiners to do the same.

Why CoinJoin is important to Bitcoin’s privacy

Hillebrand, one self described anarchist who banked himself and lives completely on Bitcoin, has devoted his career to building an open source and private Bitcoin future.

“CoinJoin is a weapon” against entities that collect know-your-customer information (KYC), Hillebrand said, since Bitcoin addresses are pseudonymous until they are tied to a real identity. “The art of privacy in Bitcoin is to ensure that these pseudonyms are not easily clustered and linked together,” he said. “If everyone uses Coinjoin, the audience will be very large and a certain Coinjoin user will stick out less.”

But concerns about the tax authorities, or even the legality of Bitcoin blending services, may scare bitcoin holders from using these privacy tools. Can users unknowingly evoke the anger of regulators by proactively anonymizing their transactions? Isn’t this all what money launderers and other criminals do?

Not so fast, says Hillebrand.

“Doing CoinJoin is just as illegal as conducting general Bitcoin transactions,” he said. Nonetheless, “if you’re a coward who doesn’t stand up for himself, use fiat and centralized banking,” he added.

While some people have said in crypto that Bitcoin is not private enough, and instead advocate using Monero, Zcash and other privacy coins, according to Hillebrand and CoinJoin advocates, there are enough tools available to make Bitcoin as private as you want.

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