SNICKER could be the next tool in Bitcoin’s growing privacy toolbox.
Although Satoshi Nakamoto’s white paper suggests that privacy was a design goal of the Bitcoin protocol, blockchain analysis can often break users’ privacy today. This is a problem. Bitcoin users might not necessarily want the world to know where they spend their money, what they earn or how much they own, while businesses may not want to leak transaction details to competitors — to list a few examples.
Fortunately, Bitcoin developers and researchers are coming up with more and more solutions for users to reclaim their privacy. One of these champions for Bitcoin privacy is Adam “waxwing” Gibson, perhaps best known for his contributions to JoinMarket, a protocol that lets users mix their coins — and offers a financial reward for participating in such mixes.
More recently, Gibson presented a new idea: SNICKER (Simple Non-Interactive Coinjoin with Keys for Encryption Reused). Now submitted as a draft Bitcoin Improvement Proposal (BIP), SNICKER would allow for coin mixing without any synchronization or interaction: There’d be no need for users to coordinate or be online at the same time.
SNICKER is based on the, by now, well-established, bitcoin mixing technique CoinJoin. Some of the most popular mixing solutions available today already use this trick, including Wasabi Wallet (ZeroLink), Samourai Wallet (Whirlpool) and JoinMarket.
CoinJoin is essentially a tool to merge several transactions into one. So let’s say Alice wants to pay Carol one bitcoin, and Bob wants to pay Dave one bitcoin. In this example, Alice and Bob can cooperate to create one big transaction, where both spend one bitcoin (two total), and Carol and Dave each receive one bitcoin. A blockchain spy will not be able to tell which of the senders paid which of the recipients, benefiting the privacy of all.
In reality, however, the amounts of bitcoin transacted are often…