A project called “CashShuffle” is building privacy-enhanced transactions into Bitcoin Cash wallet software — but without the need for coin “mixing”. The process of “shuffling” seeks to boost privacy and fungibility, putting BCH in direct competition with “privacy coins” like DASH, Monero, Zcash and Zcoin.
The Problem With Public Blockchains
One of the problems with a public, immutable ledger like the blockchain is: it’s public. All transactions from all time are out there for all to see — and analyze, perhaps to identify the parties involved and what they were doing. That’s a nightmare for both businesses and individuals who value privacy.
CashShuffle is a Bitcoin Cash (BCH) implementation of Tim Ruffing’s “CoinShuffle”” protocol, with an added matching service. The open-source project includes a plugin for the Electron Cash BCH wallet and a Golang server component, both of which are available in alpha versions to download. Eventually, the plugin will be available for other wallets too.
CashShuffle itself is merely software, not a service or provider. As such it differs from the coin mixing, or coin tumbling, services of the past.
These processes seek to disassociate the sender from the receiver, breaking or hiding the ability to trace transactions and/or identify the people involved.
Shuffling Is Safer Than Mixing
Mixers/tumblers are online services that would replace a user’s coins with “clean”, or at least new, coins. However their usability was marred by trust issues — users had to send coins to an anonymous third-party service, pay a fee, and trust they’d come back new.
Often they didn’t come back at all and, even if they did, it was impossible to know what was happening on the other side. Were the coins actually being mixed? Were mixing services scams, or “honeypot” operations run by law enforcement? Even reputable mixers could be compromised, change hands, or suddenly pull an exit-scam and disappear.
CashShuffle’s trustless client-server model removes that risk. The software “shuffles” transactions by combining them with others, obfuscating the sender and receiver.
It implements the idea of “CoinJoin”, an anonymization technique proposed by Greg Maxwell in 2014. The original “CoinShuffle” protocol adds a layered encryption scheme to hide users’ transaction outputs, and other measures to mitigate denial-of-service type attacks.
However CoinShuffle lacked any means to match participants in the transaction combination, making it more experimental than practical. CashShuffle includes a service to match users, meaning it’s usable to anyone who feels like testing the alpha release.
Is CashShuffle for Criminals? Why Do We Need Financial Privacy?
As well as making it far harder to identify parties to a transaction, shuffling also adds back fungibility — coins cannot be marked as “tainted” and/or blacklisted from certain services. This might include an exchange refusing to touch coins that have been involved in past gambling, theft, or drug transactions, regardless of whether the account holder made those transactions or not.
The idea that some coins might be blacklisted defeats the purpose of an electronic cash system — imagine if a store cashier could reject your $100 bill because it was stolen 20 years ago. To function effectively, bitcoin and other cryptocurrencies need to be “fungible” — i.e., all coins are equal.
Beyond that, there are thousands of reasons people and businesses need financial privacy. Business purchases and deals, employee salaries, “embarrassing” medical and other services, legitimate safety fears… the list goes on.
Those who would say “if you’re not doing anything wrong you’ve got nothing to hide” need to look at their own daily routines, and wonder what percentage of it they’d like livestreamed.
Would a feature like CashShuffle make Bitcoin more useful? Tell us about it in the comments.
Images via Pixabay, CashShuffle.com
The ‘Bitcoin Cash’ section at Bitsonline is sponsored by Bitcoin Cash. In hopes of bringing cryptocurrency to the masses, Bitcoin Cash has set out to provide a digital currency with on-chain scalability, so everyone can use the blockchain affordably. Learn more at BitcoinCash.org and join the official Telegram Group.