For long, Coin Control has been seen as the pinnacle of Bitcoin privacy – Why is Coin Control important, how does it work, and what are potential risks when coinjoining?
Bitcoin transactions work just like cash. When buying a bag of groceries for $25, we can combine any number of bills to add up to the desired amount, such as $10 + $10 + $5. While many wallets only show your full Bitcoin balance, your balance is likely made up of several “bitcoins”, or Unspent Transaction Outputs (UTXOs). UXTOs can be thought of as bills and coins in your physical wallet.
Unlike cash, each UTXO has a history. Due to the public nature of the blockchain, anyone is able to see where a UTXO comes from and where a UTXO is going. This creates an issue for users who may not want a recipient to know the origin of a particular UTXO used for payment.
Coin Control was first introduced to the Bitcoin Core GUI in 2013, allowing users to pick and choose certain UTXOs to spend.
For example, you may have received a UTXO from a KYC exchange and are making a transaction you don’t want associated with your identity. With Coin Control, you can exclude the KYC UTXO from the transaction.
Similarly, if a friend paid you 0.2 BTC in the past and you want to send him 0.1 BTC back, Coin Control allows you to choose the UTXO you’ve previously received, minimizing the correlation of your transactions on the blockchain.
Coin Control is a great tool to manage what information you reveal about your transactions on the blockchain. In addition, Coin Control can be applied to minimize fees or optimize for speed. When paired with coinjoin, however, Coin Control can become a lot more complicated.
All coinjoined UTXOs receive a so-called anonymity set that is dependent upon how many coinjoin rounds your transaction participated in. Imagine you need to send 0.25 BTC to a friend. You have three UTXOs of 0.1 BTC with an anonymity set of 30 and one UTXO of 0.2 BTC with an anonymity set of 10.
When optimizing for fees, it is obvious to send the UTXOs of 0.1 BTC and 0.2 BTC. But this reduces the anonymity set of your transaction to 10, inherent to the 0.2 BTC. While you’ve made a smart choice for fee optimization, you have not made a smart choice for your privacy.
Coin Control has been a long standing feature of Wasabi Wallet, but the degradation of privacy after coinjoining had been frequently observed. Users consistently chose a suboptimal combination of UTXOs to spend.
This is why Wasabi Wallet 2.0 launched with the smart coin selection feature, also known as privacy control. With smart coin selection, the software chooses the most private coins to spend for you. Non-advanced users no longer have to worry about controlling their coins manually, reducing UX friction for Bitcoin privacy beginners.
With Wasabi Wallet 2.0.3, Coin Control is back allowing advanced users to gain optional insight and control over the automated feature’s selection by holding the ‘Alt’ or ‘Option’ key in the transaction preview to optimize transactions based on personal preference.
Learn all about Wasabi Wallet 2.0.3 and all the other added features in the release notes: https://github.com/zkSNACKs/WalletWasabi/releases/tag/v2.0.3
wasabiwallet / Wasabi Wallet
npub167…8schc
2023-03-23 13:14:19
Author Public Key
npub167hmfzj38hkumks4wxny89797la0sf7wnwfrw4enlmcl82msp0cs78schcSeen on
wss://nos.lolPublished at
2023-03-23 13:14:19Event JSON
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"tags": [],
"content": "For long, Coin Control has been seen as the pinnacle of Bitcoin privacy – Why is Coin Control important, how does it work, and what are potential risks when coinjoining?\n\nBitcoin transactions work just like cash. When buying a bag of groceries for $25, we can combine any number of bills to add up to the desired amount, such as $10 + $10 + $5. While many wallets only show your full Bitcoin balance, your balance is likely made up of several “bitcoins”, or Unspent Transaction Outputs (UTXOs). UXTOs can be thought of as bills and coins in your physical wallet. \n\nUnlike cash, each UTXO has a history. Due to the public nature of the blockchain, anyone is able to see where a UTXO comes from and where a UTXO is going. This creates an issue for users who may not want a recipient to know the origin of a particular UTXO used for payment. \n\nCoin Control was first introduced to the Bitcoin Core GUI in 2013, allowing users to pick and choose certain UTXOs to spend. \n\nFor example, you may have received a UTXO from a KYC exchange and are making a transaction you don’t want associated with your identity. With Coin Control, you can exclude the KYC UTXO from the transaction. \n\nSimilarly, if a friend paid you 0.2 BTC in the past and you want to send him 0.1 BTC back, Coin Control allows you to choose the UTXO you’ve previously received, minimizing the correlation of your transactions on the blockchain. \n\nCoin Control is a great tool to manage what information you reveal about your transactions on the blockchain. In addition, Coin Control can be applied to minimize fees or optimize for speed. When paired with coinjoin, however, Coin Control can become a lot more complicated. \n\nAll coinjoined UTXOs receive a so-called anonymity set that is dependent upon how many coinjoin rounds your transaction participated in. Imagine you need to send 0.25 BTC to a friend. You have three UTXOs of 0.1 BTC with an anonymity set of 30 and one UTXO of 0.2 BTC with an anonymity set of 10. \n\nWhen optimizing for fees, it is obvious to send the UTXOs of 0.1 BTC and 0.2 BTC. But this reduces the anonymity set of your transaction to 10, inherent to the 0.2 BTC. While you’ve made a smart choice for fee optimization, you have not made a smart choice for your privacy. \n\nCoin Control has been a long standing feature of Wasabi Wallet, but the degradation of privacy after coinjoining had been frequently observed. Users consistently chose a suboptimal combination of UTXOs to spend. \n\nThis is why Wasabi Wallet 2.0 launched with the smart coin selection feature, also known as privacy control. With smart coin selection, the software chooses the most private coins to spend for you. Non-advanced users no longer have to worry about controlling their coins manually, reducing UX friction for Bitcoin privacy beginners. \n\nWith Wasabi Wallet 2.0.3, Coin Control is back allowing advanced users to gain optional insight and control over the automated feature’s selection by holding the ‘Alt’ or ‘Option’ key in the transaction preview to optimize transactions based on personal preference. \n\nLearn all about Wasabi Wallet 2.0.3 and all the other added features in the release notes: https://github.com/zkSNACKs/WalletWasabi/releases/tag/v2.0.3",
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