Bitcoin is not an anonymous cryptocurrency, that is something that is good to know and to be very clear about. However, CoinJoin can help us overcome this problem and therefore we explain here how to do a CoinJoin quickly and easily.
SIf you are a user of cryptocurrencies, Concerned about privacy, you will surely know of existence about what it is and how to use the coinjo. And it is that CoinJoin, is a cryptocurrency mixing protocol, different from those mixers, and designed to work with Bitcoin (BTC) and other cryptocurrencies like Litecoin (LTC) o Bitcoin Cash (BCH), aiming to allow us to achieve a higher level of privacy and anonymity when managing our cryptocurrencies.
In case you still don't know, Bitcoin is not anonymous. In other words, people who make transactions with this cryptocurrency can be tracked and located. The same is true of many others. If you want to know more about it, we recommend you read this article where the privacy that Bitcoin offers is explained in detail.
In Bitcoin all addresses are public, and anyone who can use a block explorer, you can review all blockchain addresses and transactions freely.
And although the blockchain does not show any personal data as such, with a lot of patience and mixing other data sources, you can know a lot about a transaction. Governments and companies analyze this with automatic software to spy on citizens, competitors, other governments. Remember that blockchains like Bitcoin will never disappear any transaction made and there are neural networks analyzing your transactions to sell you something, manipulate you or censor you at some point. In this situation, it is where CoinJoin was born, being a good option to improve our privacy.
That is why at Bit2Me Academy, we have decided to make a small guide so that you know how to use CoinJoin easily and quickly. All in order that you can improve your privacy in front of uninvited eyes to your financial transactions. Let's start!
First steps to know how to use CoinJoin
The first thing we want to tell you is that to use CoinJoin you must have in your possession a purse or wallet with this ability. There are several, but the two best-known purses in this area are Wasabi Wallet and Samourai Wallet. Both with a strong focus on privacy and security.
First of all, Wasabi Wallet is cross-platform for PC, you can use it on Linux, Windows and MacOS, but there is no version available with Android or iOS. Secondly, we have Samourai Wallet, a wallet focused on mobile devices, easy to use and with several very useful utilities if you are an advanced user of Bitcoin.
It is important to tell you to be very careful when you install these wallets, because there are many fake applications posing as these wallets. To facilitate this task, we will give you access to the official sites of both wallets.
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In this particular guide we will focus on Samourai Wallet, due to its simplicity of use and that it is a wallet with a very low balance requirement for CoinJoin. In Samourai you can start a CoinJoin using 0.005 BTC, 0.01 BTC or 0.1 BTC. But in Wasabi Wallet, you only have the option of using it from 0.1 BTC onwards, so it restricts its use significantly for those who have little BTC balance. However, both options will give you a high level of security and privacy.
However, for this tutorial we will use Samourai Wallet, which is much easier to use and the level of security provided is excellent.
Starting the process
The first thing you should do is install Samourai Wallet on your smartphone and start the process of generating the purses. Then don't forget toSecurely store the seed (or seed) from your wallet and put a secure encryption key to protect the seed.
After completing these initial configuration steps, we begin our process to use Whirlpool, the version of the CoinJoin protocol from Samourai Wallet.
In this case, our wallet has a total of 0.01513658 BTC to its credit, around € 127. With this small amount we will begin to create our Whirlpool or CoinJoin.
To start the process click on the button "+" (lower right corner) and in drop-down select Whirlpool. By choosing it, we will be immediately sent to the Samourai Wallet Whirlpool interface.
Starting the Whirlpool
At this point, the process of creating the Whirlpool begins. Here we can see that when we start our operation we do not have any balance in our Whirlpool, so we will start taking the necessary balance to create a Whirlpool transaction. By using Whirpool in Samourai Wallet we will be guaranteeing our security since this protocol is a derivative of CoinJoin improved by this team of developers.
For this we must press on the tornado icon (lower right corner), and select the option Mix UTXOs. This option will allow us to take the UTXO (Unspent Outputs) from our wallet, and send them for an effective mix. This will be our first step in creating the CoinJoin transaction, and the most important step.
When selecting Mix UTXOs We will quickly be shown a panel with the UTXOs of our wallet, in this case we will select all of them.
Clicking "Following" We will go to a box where we can configure some options about our Whirlpool (CoinJoin).
For the example we have selected the priority "Normal" for the mix cycle, since the Bitcoin network is not congested. You can see the congestion and the cost of mining fee in this link.
If you choose a priority "Low" the service and mining fees will be lower, but it will take longer. In case of selecting "High" costs increase, but your mix will be done much faster. Depending on the time you have, you can choose the option that you like the most, but keep in mind that if the network is congested, a priority mix "Normal" it may take an entire day to produce.
Finally we are shown the data of the mixture: how many UTXO will be created at the end of the process, the deterministic links, the number of combinations (10546 for our case), the level of entropy (the higher the better privacy and anonymity achieved). We also observe the mining fee, the amount to mix and the change without mixing that will be returned to us.
It is important to note that this change without mixing o Doxxic changeIt is a weak point that can destroy your privacy. This change (or amount of coins that will be returned to you) will not go through the mix, and will be sent directly to your wallet. Samourai has a solution for this, and that is to mark said change as “Not Spendable” a security measure, which will allow you to have the peace of mind of spending your money (which has been successfully mixed) without “spending this risk on privacy”.
The privacy danger of a Doxxic Change lies in the fact that not being mixed it can be a link between your wallet, the CoinJoin you make and your identity. This is not a Whirlpool or Samourai bug, it is a matter of structure in CoinJoin and the blockchain, which is also repeated in other wallets like Wasabi Wallet.
The best way to avoid this "danger" is to mark the address as non-expendable, just like Samourai does, by pressing "Yes." But don't worry, your balance is there. You can use it if you mark it as “Gastable” and send it to another wallet, completely, avoiding that it can be related to the CoinJoin that you have made. Another option if you want to gain more privacy is to create another CoinJoin with Whirlpool that only uses this change, erasing the trail entirely.
Finishing the Whirlpool (CoinJoin)
Going back to the process, we only have one thing left: wait for the mixing to take place. Depending on network congestion it may take two hours or more. So take it easy on this point by taking advantage, for example, to learn more with Bit2Me Academy while finishing the process.
When you finish the mixing process you will see the following screen.
If you look, a little satoshis is missing Where have the other 0,005 BTC gone? Don't worry, they are still in the wallet balance, only they have been marked as non-expendable and returned as cultural, . This is because CoinJoin is created to mix coins in round amounts. In Whirlpool's case, mix the coins in amounts of 0,01, 0,05, and 0,1 BTC. In our case, we initially had 0,015 BTC and we have mixed a total of 0,01 BTC. The rest are in a direction of change marked as non-expendable, to avoid breaking CoinJoin's privacy.
At this point, our mix is ready and we can make a payment with it. To do this, we press the tornado again and select "Spend Mixed UTXOs" being able to create a normal transaction that will only use specifically our mixed balance.
It is a conventional process, just enter the address where you will send the transaction, pay the mining fee and send it. With this you will have created a CoinJoin using Samourai and its Whirlpool system. Simple, don't you think?
But ... wait! How to be sure that it has worked as it should? Well, if we review the TX ID of that transaction in the block explorer, we will find esto.
You see it? It is our transaction, if you look at the details you will see that the origin of the coins marks them as "No entries (Newly generated coins)". It is as if those coins have NEVER been used in their entire history. And no, it is not a question of our explorer. You can check it in other browsers.
In the case of Blockchain, more data appears, but still continues to mark the currencies as "Newly Generated" (OP_0). Interesting, don't you think?
As you have seen the process is very simple and not difficult at all. However, using this process lightly will not protect your privacy and anonymity if it is what you want. For this you should follow the following tips:
Recommendations to perform a CoinJoin and achieve great privacy
- Make a good coin control (handling of coins in Spanish). A good strategy is to have different purses to handle different things. For example, you can have a wallet to receive payments from addresses that you have published on the Internet. At that point, you can do a CoinJoin and send the collected money to other wallets, such as for personal expenses, savings or buying online. Sending CoinJoin to these wallets, and taking care of your personal data, will maintain your privacy.
- Be careful with the Doxxic Changes, as we have mentioned marking them as non-expendable is the best. Once you've spent the CoinJoin, you can save that change for another mixing opportunity. This will protect your privacy and prevent links from being created between your mixes and their destinations.
- Avoid reusing Bitcoin addresses. Always generate new addresses in all your wallets.
- Take care of your data. Try to reduce your fingerprint, and you will be safer.
- Learn how to use CoinJoin and have used it every time you want to guarantee a higher level of anonymity on the balances you receive.
These simple tips will help you improve your privacy at all times.
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