The role of CoinJoin in making TARUSH more efficient
Well, the name says everything — it has something to do with ‘joining’ or rather merging cryptocurrency transactions. Please note that TARUSH makes use of MimbleWimble blockchain in order to offer enhanced privacy, scalability, and efficiency to its customers. Promising such big things in an industry that is already being considered ‘brittle’ takes a lot of effort and MW makes use of several algorithms and protocols offer these 3 things. Moreover, in various instances, it just picks up a basic blockchain and crypto concept and makes it even more robust by tweaking as per the current requirements of the industry.
Let’s get back to CoinJoin now, but before digging into the specifics, it is important to understand the problem for which it was introduced.
The Problem
Privacy is very important in today’s technological landscape and that is exactly what cryptocurrencies, like Bitcoin, offered in the first place. However, with the passage of time, the level of anonymity and confidentiality has become shady and the reasons are quite understandable — crypto is a tech and people want to get as deep in it as possible. If certain limitations and procedural checks are not implemented, user privacy may be compromised.
You may not like it, but let’s just accept the truth — Bitcoin is not anonymous, period. I know it is hard to believe and a lot of people also debate that since BTC wallet holders have encrypted addresses, their ID is secure. Well, that just hides your real World identity, but still, you can be monitored pretty easily on the network.
From the perspective of security agencies and KYC policies, revealing identities is a norm. However, users often feel betrayed as due to a lack of privacy. Not many of us want the public to know about spending habits and where our money goes or comes from. A solution to address this major concern is known as CoinJoin and is quite decently implemented in MimbleWimble as well.
The core BTC network is the same (w.r.t technology) as it was a decade ago. However, we can implement or rather integrate other protocols with the main chain in order to facilitate the customers.
How Does MimbleWimble Fit into the Scenario?
As you might have guessed, MW makes use of CoinJoin in order to merge multiple transactions into a single block, cryptographically. The underlying idea is very simple. Suppose a thousand users send payments to 500 users. Now typically, a ledger would record all the transaction details together with the information related to senders, receivers and even all the intermediaries! This is not only a risk to user anonymity but makes the process far less efficient than it should be. However, with the help of CoinJoin, MW allows its users to enjoy an escalated level of privacy by ensuring that “sensitive” details are never put on the ledger. So several payments from a variety of senders are literally “squeezed” into one major transaction and are then sent to respective receivers.
Since minimum user details are required and every transaction gets merged, it is quite difficult for anyone to guess the sender, recipient or the amount being transferred. Not only that, but MimbleWimble also saves an immense amount of block space since it only takes the “most important” data from the users. If you are curious about double spending, please note that MW has a pretty robust way in which it subtracts the sum of total outputs from total inputs. If the answer is zero, it means that there is no double spending and the financial activity is happening perfectly within the network. Contrary to this, Bitcoin takes a long way to verify a transaction by engaging the entire chain for validation. This is not feasible and is a serious blow to scalability as well.
So it is pretty evident that with the help of CoinJoin and a variety of other procedures, MimbleWimble does not only guarantee scalability by diminishing the amount of data carried in transactions (hence entertaining a greater volume in a given time), but it also boosts user privacy by getting rid of the wallet and IP addresses before broadcasting a transaction. Furthermore, it also “jumbles up” the inputs and outputs, hence thwarting the probability of constructing a transaction graph and tracing the users.
The situation begs a question — is MimbleWimble greater than all other blockchains in the market? Well, I won’t boast about it but yes, as of yet, MW happens to be the best protocol when we talk about privacy, scalability, fungibility, and efficiency. One of the most noticeable factors is that it gets rid of signatures which are required to authenticate a transaction in traditional blockchain networks. Rather, it uses a couple of blinding factors to ensure that the coin being transferred belongs to the sender. It ensures that even after a transaction is recorded in the ledger, no one can find the parties at either end.
Now if you look at it, the feasibility is huge and it gives TARUSH a major edge when we compare it with other sidechains designed for the BTC network. Currently, there are only a few users involved. But with the passage of time, when the network becomes even dense, it would become significantly difficult to create a transaction graph for a given user. Therefore, no one will be able to derive any relationships.
It should also be noted that while offering such a great solution, TARUSH does not compromise on either privacy or scalability. It offers both an incredible technological advancement. It is also worth mentioning that in the entire process, the MW protocol cancels out the new and old transactions. As a result, when a new node is added on the network, it does not have to sync with the entire transaction history, hence keeping the chain light.
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