CoinJoin is an algorithm by which the confidentiality of participants in decentralized projects is maintained.

Since their inception, all cryptocurrency financial systems have been presented to users as completely confidential and anonymous systems. However, in reality, this is not entirely true. Anonymity and confidentiality are ensured through additional technologies such as CoinJoin.

History of the creation of CoinJoin

CoinJoin is a technology, an algorithm proposed by Bitcoin developers back in 2013. It is through this protocol that the anonymization of all transactions is ensured. Through the use of such technology, the coins of several users are mixed. After dividing them into equal parts, each share is sent to the specified recipients. As a result, a third party cannot be 100% sure of the authenticity of the identification of transaction participants.

The algorithm operates under the conditions of the highest possible security and complete decentralization today.

Problems that CoinJoin solves

Due to the open-source code, it is possible to analyze the public blockchain in the Bitcoin network, which, in the absence of the CoinJoin algorithm, still allows you to make a transaction connection with a specific client.

You can understand the essence of how the CoinJoin algorithm works using the example of general purchases when several people deposit into one wallet. Still, when calculating, it is not a fact that the purchases will be paid for with coins of the same denomination that were invested in it. That is, multiple parties create a transaction, each party specifying inputs and outputs. The inputs are combined, and it is impossible to know which user used which input clearly.