Mastering Blockchain - Second Edition

Third-party mixing protocols

Various third-party mixing services are available, but if the service is centralized, then it poses the threat of tracing the mapping between senders and receivers because the mixing service knows about all inputs and outputs. In addition to this, fully centralized miners even pose the risk of the administrators of the service stealing the coins.

Various services, with varying degrees of complexity, such as CoinShuffle, Coinmux, and Darksend in Dash (coin) are available that are based on the idea of CoinJoin (mixing) transactions. CoinShuffle is a decentralized alternative to traditional mixing services as it does not require a trusted third party.

CoinJoin-based schemes, however, have some weaknesses, most prominently ...