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The crypto world moves so fast that many times some important concepts like what is CoinJoin get in the way. Therefore, from Bitnovo we decided to create an exclusive article to explain it.
“Coinjoin” might be a good name for one of the games to win bitcoins, but the reality is that it refers to something completely different.
Coin means currency.
Join means to join.
The result is CoinJoin, a method of joining different Bitcoin transactions from multiple people into a single transaction.
For what? Once those transactions are unified, it is more difficult to determine where those funds are coming from. With Coinjoin, not even the receiver of the transaction will be able to determine the origin because they will not have the possibility to see or associate the entries and exits of the transactions.
This is especially useful in currencies like Bitcoin, which while private is not 100% anonymous. If someone wanted, they could cross-link data from digital profiles and analyze movement data, to determine a certain identity associated with a transaction.
Therefore, it is important to know what CoinJoin is and how it can be used.
How to use a CoinJoin?
Steps to follow:
Pros of using CoinJoin
– Helps to improve crypto privacy.
– We do not need changes in the protocol to make a Coinjoin.
– It maintains the compatibility of Bitcoin with other clients without problems.
Cons of using CoinJoin
– Making a coinjoin can mix our transactions with others that come from illicit activities.
– The process is not that simple yet for a user new to the crypto world.
Is CoinJoin 100% anonymous?
It is not appropriate to say that CoinJoin is 100% anonymous, since even carrying out this process, data analysis could be done to identify identities. What is true is that it greatly improves the privacy of Bitcoin and other cryptocurrencies. So unless you’ve committed a very serious crime and have the FBI in your wake, you shouldn’t worry too much.
Now that you know what CoinJoin is, you can add a nice layer of privacy to your Bitcoin transactions. If you are a person who really values privacy, you will surely find many more useful articles on our blog.