When Will Bitcoin Finally Get Better Privacy?

Although the media often hypes up Bitcoin as an anonymous, untraceable form of digital cash, the reality is that the blockchain is in desperate need of better privacy features. Earlier this year, the Open Bitcoin Privacy Project describe the sad state of privacy in bitcoin wallets in the second edition of their Bitcoin Wallet Privacy Rating Report.
There have been many proposals made for privacy-focused improvements to Bitcoin, but practically none of them have been implemented in any real, meaningful manner. Some useful improvements appear to be quite close to release, while others may take much longer. There are also some changes that bitcoin wallet developers and users could make today to improve privacy for everyone.
What Can Be Done Right Now?
A few months ago, Blockstream Testing Engineer Jonas Nick gave a presentation on Bitcoin privacy at Blockchain Meetup Zurich. During that presentation, Nick provided recommendations to developers and users as to how privacy in Bitcoin can be improved over the short term. ‘Choose a wallet that is popular and implement a plugin that connects to JoinMarket . . . I think that’s the most practical way for how to go forward,’ Nick told the developers in the audience.
JoinMarket is an implementation of CoinJoin with an incentive structure aimed at convincing more bitcoin users to mix their coins with each other. Although CoinJoin was first proposed by Blockstream CTO and Bitcoin Core contributor Greg Maxwell back in August of 2013, it still isn’t used on a large scale. JoinMarket has been the first project to get the average Bitcoin user to care about CoinJoin.

This post was published at Inside Bitcoins on Jul 4, 2016.