Bitcoin CoinSwap Protocol Design Spurs Discussion Online

An updated version of the Bitcoin CoinSwap protocol design has spurred a lot of discussion online and in the latest crypto news, after one UK-based developer released a design document for the routed multi-transaction implementation. It was the UK developer Chris Belcher who released the document, developing his work on improving the Bitcoin (BTC) transaction privacy and fungibility.

The post comprises a detailed design of the first protocol version and has spurred a lot of discussions. Some voices from the cryptoverse are even inquiring on the protocol’s safety in using cryptography and ensuring the transactions would be safe for both parties.

According to Belcher, the Bitcoin CoinSwap protocol design  “makes use of the building blocks of multi-transaction CoinSwaps, routed CoinSwaps, liquidity market, private key handover, and fidelity bonds. It does not include PayJoin-with-CoinSwap, but that’s in the plan to be added later,”

Furthermore, the proposal builds on the design that the developer had from last May, when he explained how CoinSwap’s implementation could ensure undetectable privacy to cryptocurrency transactions.

For those of you not following the Bitcoin news now, CoinSwap is actually not a new thing. The Bitcoin CoinSwap protocol design was originally created seven years ago by Greg Maxwell, the co-founder of Blockstream and creator of CoinJoin. With Belcher’s implementation, it came back into public’s attention and basically allows two or several parties to swap coins, ensuring improved privacy and fungibility.

The August design of this protocol triggered a lot of reactions on GitHub. While most of the users recognized the innovativeness of Belcher’s code, others asked a number of highly technical and detailed questions about the protocol and its functionalities.

“In CoinJoin, since all participants sign a single transaction, every participant knows the total number of participants. Thus, in CoinJoin, it is fairly useless to have just one taker and one maker, the maker knows exactly which output belongs to the taker. Even if all communications were done via the single paying taker, the maker(s) are shown the final transaction and thus can easily know how many participants there are (by counting the number of equal-valued outputs),” wrote user ZmnSCPxj

All in all, the Bitcoin CoinSwap protocol design is a great advancement and despite all comments and controversy, in June 2019 Belcher was the recipient of the first gift from the newly launched Bitcoin Development Fund.