21inc’s Balaji S. Srinivasan recently pointed out an interesting paper that proposes to anonymize all Bitcoin transactions. The process is called Mimblewimble, and it prevents the blockchain from broadcasting user information.
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Mimblewimble Proposes to Anonymize All BTC Transactions
The paper written by Tom Elvis Jedusor published on July 19 gives a comprehensive new outlook on the anonymization of Bitcoin transactions. Jedusor explains how Bitcoin exchanges can be monitored and mentions there are companies are being created at this very moment to bolster this activity.
The writer also acknowledges proposed solutions that are already on the table such as CoinJoin, encryption of broadcasted amounts, and the confidential transactions concept. All of these use cases are helpful, but face issues, such as data being leaked and CoinJoin’s need for interactivity.
The method Jedusor proposes has its own potential downfalls, one of them being the removal of Bitcoin’s script.
The author explains the theory:
Confidential Transactions and one-way aggregate signatures (OWAS).The first thing we need to do is remove Bitcoin Script. This is sad, but it is too powerful so it is impossible to merge