CoinJoin Explained

CoinJoin, first proposed by Bitcoin developer Gregory Maxwell in 2013, is a trustless privacy technique where multiple users combine their transactions into a single joint transaction. The key insight: if all outputs have equal value, an observer cannot determine which input funded which output.

How CoinJoin Works

In a standard Bitcoin transaction, one sender pays one recipient. Every input is clearly linked to its outputs. CoinJoin changes this by having multiple senders construct a single transaction together:

1. Registration: Multiple users register their inputs and desired output addresses with a coordinator.
2. Construction: The coordinator builds a transaction that combines all inputs and all outputs.
3. Signing: Each user independently verifies the transaction (ensuring their output is present and correct) and signs only their own input.
4. Broadcast: The fully signed transaction is broadcast to the Bitcoin network.

Because users only sign their own inputs, the coordinator cannot steal funds. If the coordinator tried to redirect an output, the affected user would simply refuse to sign.

CoinJoin Implementations

WabiSabi (Wasabi Wallet)

WabiSabi is Wasabi Wallet's second-generation CoinJoin protocol (replacing ZeroLink). It uses keyed-verification anonymous credentials to allow variable-amount outputs while maintaining privacy. This means participants don't need to use exact denominations — the protocol handles amount decomposition internally.

Whirlpool (Samourai Wallet)

Whirlpool uses fixed-denomination pools (0.001, 0.01, 0.05, 0.5 BTC) for maximum anonymity set per round. Each mix produces exactly 5 outputs of equal value. Users can "remix" for free in subsequent rounds, compounding their anonymity set.

Note: Samourai Wallet founders were arrested in April 2024 and charged with money laundering conspiracy. The wallet's infrastructure was seized, though the open-source code remains available.

PayJoin (P2EP)

PayJoin (Pay-to-EndPoint) is a CoinJoin variant where both the sender and receiver contribute inputs to a transaction. This makes the payment itself look like a CoinJoin, breaking chain analysis heuristics that assume all inputs belong to the same entity.

CoinJoin vs Custodial Mixing

• Trust: CoinJoin is non-custodial — no one can steal your funds. Custodial mixers hold your BTC temporarily.
• Privacy depth: CoinJoin's anonymity set depends on the number of participants per round. Custodial mixers' pool size is often larger.
• Speed: CoinJoin rounds require enough participants. Custodial mixers can process immediately from reserves.
• Cost: CoinJoin fees are typically lower (coordinator fee + mining fee). Custodial mixers charge 1–5%.

CoinJoin-Based Services in Our Directory

Several mixers in our directory use CoinJoin technology:

• Whir — CoinJoin-based mixer with low fees
• UniJoin — CoinJoin with selectable mixing strength

For CoinJoin integration in your wallet, see our Privacy Wallets section — particularly Wasabi Wallet and Sparrow Wallet.