6. CoinJoin
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Gregory Maxwell introduces an alternative solution to increase the level of privacy of Bitcoin users, called CoinJoin¹³, which is a development of the ideas previously presented about Taint¹⁴, CoinJoin is a mechanism that combines several similar transactions into a transaction that consists of many inputs and outputs. The CoinJoin concept then implemented into an application called CoinJoin¹⁵.

Quote from: gmaxwell on August 22, 2013, 02:32:31 AM

-snip-

CoinJoin Transactions¹³

The picture above explains how CoinJoin works and how it compares to Bitcoin transactions.

In transaction 1, a 1FF address that has 50 BTC wants to send 0.5 BTC to another address, 1A1, with a return address of 1FF. At the end of the transaction, the 1FF address will have 49.5 BTC bitcoin.

In transaction 2, there are many input and output addresses. Although this scheme looks like an ordinary Bitcoin transaction, it can be used to protect the identity of the user associated with the transaction. For example, the owner of address 1A1 wants to send 0.8 BTC to 1E5 and does not want anyone else to know of this transaction, so he combines the transaction with another transaction of the same size, for example, from address 1C3 to 1D4. It means that by looking at the transaction, the observer cannot determine which address receives the 1A1 address, because the bitcoin could have originated from 1D4 or 1E5.

UPDATE
Among the applications that are pioneers in the implementation of the CoinJoin concept:

Quote from: nopara73 on April 03, 2019, 11:36:41 AM

-snip-

Link to download: https://wasabiwallet.io/

Quote from: theymos on May 30, 2019, 03:09:09 AM

Congratulations to the Wasabi and JoinMarket developers! JoinMarket pioneered a lot of CoinJoin science (and BTW, belcher wrote an excellent & comprehensive wiki article on privacy), while Wasabi is the first wallet that implements CoinJoin in both a highly-usable and sound way. As both a signer and a donor to the CoinJoin bounty fund, I'm thrilled that these two pieces of software exist!

For everyone looking to improve their privacy, I highly recommend checking out Wasabi, especially over centralized "mixers". -snip-

Reference:
13. gmaxwell, CoinJoin: Bitcoin privacy for the real world
14. gmaxwell, I taint rich! (Raw txn fun and disrupting 'taint' analysis; >51kBTC linked!)
15. P. Martin & A. Taaki. (2013, August 25, 2015) Anonymous Bitcoin Transactions.
- Dimaz A.W. & Oscar D., Blockchain dari Bitcoin untuk Dunia, pages 104-105, 2017: Jasakom
- Other references look at post #1