Even if CoinJoin shuts down, Bitcoin’s privacy will remain – zkSNACKs CEO
The Bitcoin (BTC) ecosystem will soon lose an important privacy-enhancing service after zkSNACKs announced that it will discontinue its CoinJoin coordination service.
zkSNACKs CEO Max Hillebrand spoke exclusively to Cointelegraph after the announcement and explained that the decision was made to ensure compliance with recent legal and regulatory reforms in the United States.
Hillebrand said the shutdown of CoinJoin's service was necessary because of the lack of clarity in the regulations regarding the cryptocurrency space and the use of privacy-enhancing tools in the US.
Former NSA whistleblower Edward Snowden was among the commenters who complained about the service outage.
According to the CEO of zkSNACKs, the Bitcoin ecosystem will inevitably lose an important service that helps users to move in privacy through the coinjoin method:
“Bitcoin privacy will survive, but reducing support from zkSNACKs to Bitcoin developers and privacy educators is a sad failure.”
Hillebrand confirmed that the Wasabi Wallet, a Bitcoin wallet developed by zkSNACKs that includes the CoinJoin service, will continue to function as a regular BTC wallet. Users can generate private keys to receive and send Bitcoin.
Coinjoins provide complete privacy
Despite the shutdown of CoinJoin's service, Hillebrand said Wasabi's client-side filtering architecture, Tor integration, and custom coin selection still provide significant privacy for users. However, the level of privacy provided by CoinJoins is unmatched in the future.
“The nature of the Bitcoin blockchain prevents users from achieving full privacy without CoinJoins,” Hillebrand admitted.
Related: Snowden goes after Bitcoin devs, Elon Musk and puppy killers in X Free
zkSNACKs CEO was hesitant to speculate that similar attacks on privacy protocols and CoinJoin services would occur in jurisdictions outside of the US.
The shutdown of zkSNACK's CoinJoin coordination service also affected products and services around the ecosystem. Hardware wallet services Trezor Suite and BTCPayServer will not be able to provide the service to the users from June 2024.
Cointelegraph reached out to Trezor for comment on the shutdown of zkSNACKs' CoinJoin and whether it plans to use another Bitcoin privacy-enhancing service for its users.
How does CoinJoin work?
Hillebrand went into detail about zkSNACKs CoinJoin service during an in-depth interview with Cointelegraph at Bitcoin Amsterdam 2023.
As Hillebrand explained, the CoinJoin service combines inputs and outputs from multiple users into a single transaction and provides an effective way to hide Bitcoin transactions, making it very difficult for outside observers to determine specific transaction details.
Related: Trezor wallet enables Bitcoin privacy feature with CoinJoin
Wasabi Wallet was launched in 2018 following extensive research. The wallet uses Tor for anonymity, uses a thin client approach to check balances without compromising privacy, and uses block filters to efficiently and securely verify transactions without downloading the entire Bitcoin blockchain.
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