What is CoinJoin?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
CoinJoin is a scheme where several participants jointly build a single transaction from their own funds. Because the mapping between inputs and outputs is no longer unique from the outside, it undermines the common-input assumption that chain analysis relies on. At the same time, deposits carrying such a history have reportedly been held for review by some services.
Key points
- Several parties assemble one transaction together
- The input-to-output mapping stops being uniquely determinable
- No ownership passes between the participants
- Some services flag or hold deposits with this history
Definition
A construction in which multiple users contribute their own inputs and outputs to one jointly signed transaction. Each participant's funds reach their own output, but outsiders cannot tell which input corresponds to which output.
Chain analysis leans on the assumption that all inputs to one transaction share an owner. CoinJoin is built to break that assumption. If three people each contribute an input and the transaction produces three equal outputs, an outsider cannot say which input led to which output.
Crucially, no ownership changes hands along the way. Each participant keeps the key to their own output and never hands funds to a custodian. The transaction only becomes valid once every signature is present, so a participant dropping out does not put anyone's money at risk.
The practical question is how the resulting history is treated later. Some exchanges and services have been reported to request additional explanation, or to hold deposits, when funds passed through a jointly built transaction. That a technique works is a separate matter from whether service providers will accept it.
Watch out for
- · This article describes the mechanism; it is not a how-to or a service recommendation
- · Some providers request further explanation, or hold such deposits for review
- · Distinctive amounts or timing can still leave room for inference