Many people consider bitcoin to be an anonymous method of transacting money. However, research has shown that this is not the case. While the owners of any particular bitcoin address maybe anonymous by default, through a process called blockchain analysis, the owners of these addresses can potentially be determined. Once the owner is identified for sure, every transaction they’ve ever made having anything to do with the pinpointed address can also be attached to that user.
In the wake of such realizations, many privacy-centric cryptocurrencies have appeared on the scene such as Dash, Monero, and PIVX, and have steadily gained popularity since their respective launches. Bitcoin, however, has yet to have its own affordable and useful anonymizing tool or function.
That is about to change however as software developer Adam Ficsor is about to launch his innovative ZeroLink CoinJoin tumble service.
What is Coin Mixing?
Coin mixing, or tumbling, can be understood using the example of how a washing machine works. Items are put in, they are mixed together randomly, and they are taken out in a different order. In this example though, the items that go in come out in roughly the same shape and size. With bitcoin or other cryptocurrency mixing, the actual elements can be separated, split apart, and put back together many different times.
The point of doing this is to obfuscate or otherwise make it impossible to track where certain cryptocurrency units came from before they are sent off again. This kind of service typically comes with a fee, and can occasionally be very expensive.
Some fraudsters in the past have also use the excuse of coin mixing as a way to justify their Ponzi schemes.
Get $10 for Participating in the Test
The developers behind ZeroLink are holding a live test on the Bitcoin test network with real people. The test aims at getting somewhere between 21 and 100 users. Once that threshold is met, the trial will begin. If the test completes successfully, then the service will go live on the real bitcoin network shortly after.
Participants in the test will be rewarded with $10. Payment will be made in bitcoin shortly after the test is over. Participation requires access to the Bitcoin test network.
Impact on other Privacy-centric Cryptocurrencies
The development begs the question, what will happen to other privacy-centric cryptocurrencies if bitcoin can offer the same or similar levels of privacy through services like a ZeroLink?
While it’s impossible to say exactly what the impact would be, it is safe to suggest that this should not take away much value from other privacy-centric projects. Coins like Monero and Zcash, in part, will remain robust because smart investors will want to diversify their holdings, and also because spreading out one’s assets across several networks makes it even more difficult to track. Finally, if the privacy protocols of one of the cryptocurrencies are hacked or otherwise defeated, one’s holdings in the other unhacked protocols would remain secure.
ZeroLink CoinJoin however is offering the ability to anonymize one’s holdings without needing to pay conversion fees or exchange fees to move into an entirely different blockchain.
The final test of coin join will occur either when 100 users have joined the test, or when December 20 has passed, and there were at least 21 users participating simultaneously.