In the world of cryptocurrency, Bitcoin takes the leading place. Its special feature is anonymity, but this is not entirely true. According to experts, the privacy of its users is often questioned. Analysts emphasize that the cryptocurrency number 1 has pseudonymity, that is, when carrying out transactions it is enough to specify only a pseudonym. In the Bitcoin network, the address from which the client sends the funds and receives them plays the role of a pseudonym. To ensure the protection of users, developers offer a number of technologies that have proven effective.
TumbleBit
This development has continued for almost two years and is nearly completed. This is one of the most effective solutions aimed at protecting the anonymity of Bitcoin users. The TumbleBit protocol is a way of mixing coins with a centralized switch to create payment channels between transaction participants. This solution requires two transactions for one participant. One operation is necessary to open a network channel, the other - to close it. The only disadvantage of this project is high commission fees.
Chaumian CoinJoin
The development of CoinJoin technology began in 2013. This solution consists in combining several small transactions into one large transaction. Thanks to this combination, high anonymity is achieved. Information about what bitcoins are sent from the sending addresses (inputs) to the receiving addresses (outputs) becomes classified. CoinJoin transactions are available for a long time, but there are certain difficulties with their creation. To solve this problem, experts suggest using the technology of "blind" signatures by David Chaum (Chaumian CoinJoin).
Schnorr signature
This technology was developed by Pieter Wuille, the creator of Bitcoin Core. Named after the inventor of Klaus-Peter Schnorr, these signatures are recognized as the best available in cryptography. Their advantage is in combining many signatures into one. As a result, a transaction requires only one signature, regardless of how many sending addresses are included in it. Schnorr's signatures not only allow all participants to combine their transactions, but also they bring economic benefits. When using this option, the level of anonymity increases many times. The technology will be launched in 2019.
STONEWALL
The development of STONEWALL technology started in May this year. With the help of STONEWALL transactions, one user sends bitcoins to another. The peculiarity of these operations is that they include a number of sending addresses that change the addresses of recipients. This creates a visibility of transactions. There is a "masking" of the money transfer, ensuring its anonymity. The idea of STONEWALL transactions is to create hindrances for hackers. According to experts, the technology copes with this task. Its launch is scheduled for late 2018.
Dandelion
Another way to increase privacy for users of the Bitcoin network was offered by American scientists. This is the technology of Dandelion. It makes it difficult to analyze the network, blocks attempts to enter it, and changes the order of the distribution of transactions. This offer was highly appreciated in the bitcoin community. Experts believe that in the near future, Dandelion will be included in the Bitcoin Core system.
BIP-151
This technology implies limiting extraneous exposure in the Bitcoin network. This method allows bitcoin nodes to encrypt traffic passing between them, including transactions and data about blockchains. The downside of the BIP-151 system is the inadequate provision of privacy. Nevertheless, experts consider this method effective to counter various types of hacker attacks. The launch of the technology is expected in 2019.
Liquid and Confidential Transactions
The purpose of this technology is to ensure the availability and anonymity of transactions between exchanges and large brokerage firms. In the future, access to Liquid wallets will be received by ordinary users. One of the important functions of the system is confidential transactions. This is a cryptographic method of masking the amount of funds sent and received. The advantage of this technology is the impossibility to track the movement of funds between companies. This ensures high confidentiality in transactions.
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