With Privacy Becoming Ever Important, Which Protocol Will Win?
Privacy and anonymity were one of Bitcoin's key initial features. In an age of mass surveillance, people wanted a form of money that is secure and private. Bitcoin's founder Satoshi Nakamoto seemed to understand the importance of privacy and one of Hal Finney's last tweets seemed to reinforce that.
Roughly ten years have gone by since Hal Finney passed away and Satoshi Nakamoto also seemingly disappeared. Due to many years passing and no additional privacy features added, Bitcoin is only semi-anonymous at best. It is no longer considered the standard for anonymous transactions amongst cryptocurrencies.
Some new cryptocurrencies have sported higher levels of anonymity such as Zcash, Monero, Beam & Grin. These currencies contain some of the highest standards of encryption but might be banned in the U.S. & elsewhere due to regulations.
Many projects are looking to add or improve on existing anonymity features and protocols. Litecoin has recently partnered with Grin Developer David Burkett, to implement Grin's MimbleWimble protocol, while Bitcoin Cash has gone a different route.
CashFusion or CashShuffle?
Bitcoin Cash has managed to release two separate protocols with a very similar goal. This is CashShuffle which has been out for a while and CashFusion which was only recently released. Both are rooted in CoinJoin technology.
CashShuffle uses a coin mixing protocol that shuffles your Bitcoin Cash with other users Bitcoin Cash. This process makes transaction tracking & chain analysis very difficult. Cash Shuffle works with funds in your wallet upon the user's selection. The cost of "shuffling" coins usually equates to a few sats or pennies in fiat value.
CashFusion is nearly identical in design and execution. It seems that the only major change seems to be the use of a different and possibly improved algorithm. A reddit post by Bitcoin.com's Roger Ver, suggests that both will be integrated at one point or another in Bitcoin.com's wallet.
The only drawbacks to these functionalities are the fact that they are only available in the Electron Cash wallet at this time & require a minor fee.
CashFushion CashShuffle VS MimbleWimble
The MimbleWimble protocol has taken the cryptocurrency community by storm when released. It has been implemented by privacy coins Grin & Beam and will be implemented by Litecoin. In a nutshell, MimbleWimble removes addresses, doesn't contain transaction amounts and removes transaction history.
On paper, it could be the highest standard of anonymity, but a paper published yesterday casts doubt on the claim.
I just published a new attack that breaks Mimblewimble's privacy model. This attack traces 96% of all sender and recipient addresses in real time. Here's a summary and what it means for the future of privacy coins:https://t.co/tsIDLyfpzp— Ivan Bogatyy (@IvanBogatyy) November 18, 2019
This post seemed to rile up many in the crypto community and it didn't take long for a reply to come. They have claimed that MimbleWimble is not flawed & the article contained inaccuracies and is sensationalized. Despite that, they have also addressed a "known limitation" with MimbleWimble.
The Bottom Line
Bitcoin Cash's Cash Fusion & Cash Shuffle seems like a great way to keep discrete transactions private. Having 2 different standards as opposed to 1 could make a codebreaker's life twice as difficult. It could possibly grow support for Bitcoin Cash in the long run, as long as it is added to additional wallets.
The MimbleWimble protocol will likely go through intense inspections by users in the next few days to see if there is any truth to the allegations. Regardless, any major cryptocurrency adding anonymity features is admirable.
Good job Litecoin & Bitcoin Cash!
The only major lurking concern is the reaction of regulators to anonymity features.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado