SharedCoin is a startup protecting the payments up to 50 bitcoins with the use of DarkCoin similar protective scheme. However, here the encryption scheme is activated manually, by default it is disabled. Transaction logs are not stored on startup servers: short-term in-memory caching is used for this purpose.
SharedCoin provides privacy for users’ transactions by combining their transactions with other. Shared Coin uses a technique similar to CoinJoin to make transactions private without needing to trust the SharedCoin service. A user’s coins never leave their control and therefore it is impossible for them to be stolen or confiscated. SharedCoin is based on the CoinJoin concept which acts as a meeting point for multiple people to join together in a single transaction. Having multiple people in a transaction improves privacy by making transactions more difficult to analyse. The important distinction between traditional mixing services is the server cannot confiscate or steal user’s coins.
Blockchain.info’s SharedCoin service is an open-source implementation of the CoinJoin privacy protocol, and is often referred to as a ‘mixer’. While transactions on the bitcoin blockchain are open for all to see (at least at the public address level), SharedCoin will collect a group of users wishing to increase privacy and join their transactions into one ‘master transaction’ before broadcasting it to the network.
The transaction that then appears on the blockchain would have multiple outputs and inputs, supposedly making it worthless for analysis. Customers may select the number of times to repeat the SharedCoin process, between two and ten. While offering enhanced privacy to users, SharedCoin and mixing services hope to better protect all users by making the bitcoin blockchain overall a less dependable tool for connecting bitcoin addresses to individuals.
Need for privacy
Blockchain.info officially began offering SharedCoin as a free service to its users last November, around the time Matt Mellon’s ‘CoinValidation’ and other services appeared, which promised to track specific bitcoins and addresses connected to suspicious or other investigation-worthy activity. It did not claim, however, to provide 100% protection from such services.
Older style mixing tools (also known as ‘tumblers’) would forward a payment around several different addresses to make the originator hard to find, usually on a private server, or ‘off-chain’. Such systems, however, required trust from users that anonymous operators would not simply confiscate or steal the bitcoins before they emerged from the mixer.
SharedCoin, and the CoinJoin protocol itself, provided a system that required less trust in the operator, by taking advantage of a bitcoin transaction’s ability to have multiple inputs and outputs.
What logs are kept?
The server does not need to keep any logs and transactions are only kept in memory for a short time. However if the server was compromised or under subpoena it could be force to keep logs. If this were to happen although you haven’t gained any privacy you haven’t lost any either.
Between 30 seconds to 5 minutes depending on the number of iterations.
Is there a maximum transaction size?
The maximum transaction size is 50 BTC.
The user should also remember that SharedCoin can never completely sever the link between the input and destination address, there will always be a connection between them, it is just more difficult to analyse.
- SharedCoin Official website
- SharedCoin – GitHub
- SharedCoin Users Can Be Identified – Cointelegraph
- Blockchain.info – Shared Coin in BlockChain new wallet?