Who will run the CoinJoin coordinators?

Posted by conduition

Jun 2, 2024/22:18 UTC

The discussion revolves around the current limitations and potential future enhancements in cryptocurrency anonymization techniques. The joinstr protocol, despite its innovative approach, is considered too nascent to replace centralized coordinators effectively at this stage. Issues with Joinmarket's user experience and setup complexity were highlighted, alongside an unsuccessful attempt to utilize its automatic mixing system. Conversely, Jam has not been evaluated by the author.

A speculative alternative presented involves utilizing ecash for off-chain coin mixing. This method would theoretically leverage Lightning Network (LN) payments, routing them through various mints to obscure transaction correlations. The efficacy of such a strategy currently faces challenges due to the limited pool of funds in ecash mints and the predictability of transaction patterns. Moreover, employing TOR and timing strategies to mitigate network-level correlation was suggested, albeit with reservations about its current viability.

Looking forward, the integration of Point Time-Locked Contracts (PTLCs) into the Lightning Network is anticipated to significantly enhance privacy measures by addressing payment-hash correlation vulnerabilities. A proposed application of PTLCs involves their use in submarine swaps, allowing the division of a single pre-swap Unspent Transaction Output (UTXO) into multiple smaller post-swap UTXOs. This method could effectively conceal transactions within a larger set of UTXOs associated with popular services executing submarine swaps, such as LN-Labs' Loop, thereby offering a promising avenue for improved cryptocurrency anonymization in the future.

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