Trezor, a cryptocurrency hardware wallet company, has partnered with Wasabi Wallet to improve the privacy of Bitcoin transactions. The collaboration has resulted in the introduction of CoinJoin on Trezor’s hardware wallets, which allows users to enhance their Bitcoin transaction security and privacy.
What is CoinJoin?
According to Cointelegraph, CoinJoin is a method for making Bitcoin transactions more anonymous. It allows users to send their BTC as part of a large collaborative transfer, thus obfuscating transaction history. This method was first introduced in 2013 by former Bitcoin core developer Gregory Maxwell.
How Does It Work?
Trezor’s collaboration with Wasabi Wallet makes the CoinJoin option available on its hardware wallets. Users need to open a new CoinJoin account on the main Trezor menu to enable this feature. They can then select the CoinJoin option, along with other account types, such as Segregated Witness and Bitcoin Taproot accounts.
In order to optimize its effectiveness in terms of giving users a veil of secrecy in their dealings, the CoinJoin feature on Trezor prompts them to allow the anonymous communication protocol, Tor.
In an interview with Josef Tetek, a Bitcoin analyst from Trezor, the feature is completely optional. Therefore, users can simply opt out of it if they don’t feel like it can benefit them.
Benefits and Drawbacks
CoinJoin enables users to make more private transactions, but it comes with some additional costs. When entering a CoinJoin, users must shell out a 0.3% coordinator fee plus a mining fee. Additionally, the CoinJoin process can take up to several hours, making it slower than regular transactions. With these, users have to weigh whether or not the pros far outweigh the cons of the system.
Why is Privacy Important?
Trezor CEO Matěj Žák emphasizes that privacy is of utmost importance to individuals. The company boss notes that he is delighted that they have found a way for their community to keep their Bitcoin history private.
Trezor’s partnership with Wasabi Wallet has resulted in the introduction of CoinJoin on its hardware wallets, allowing users to enhance their Bitcoin transaction security and privacy. While there are some additional costs associated with using this feature, it offers users an important tool for maintaining their privacy in an increasingly digitally-dependent world.
On a personal note, user anonymity matters because it ensures that Bitcoin transactions are private and secure. Without it, it would be easy for anyone to track and trace a user’s transactions, which could potentially reveal sensitive information about their financial activities and habits.
Secrecy is especially important in a decentralized and open network like Bitcoin, where there is no central authority to regulate transactions. By enabling anonymity through features like CoinJoin, users can protect their privacy and prevent their transactions from being linked to their identities. This makes it more difficult for hackers, cybercriminals, and other malicious actors to exploit the user’s financial information.
Furthermore, anonymity helps to prevent government surveillance and censorship, which is now a growing worry among crypto users. This allows users to conduct transactions freely and without fear of reprisal.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.