Coin Control Is Must Learn If You Care About Your Privacy In Bitcoin

Naive Bitcoin Transaction

Avoiding Address Reuse

This is the very first privacy technique originating all the way back from the Bitcoin whitepaper. The concept is the same, but instead of getting back the change to the same address, your wallet software internally generates a third address where you receive the change. This highlighted another problem, with how you store so many addresses in a wallet. We solved this issue with Hierarchical Deterministic wallets, but this is outside the scope of this article. You will most often make transactions like this with your Bitcoin wallet:

Bitcoin Core’s Coin Control

Bitcoin Mixers

Let’s talk a bit about Bitcoin mixers. I am going to show you that, without using a coin control feature you are going to be deanonymized, even if you use Bitcoin mixers.

Traditional Mixers

Examples: Centralized Mixers, SharedCoin
Theory:
1. coins go in, 2. coins come out -> you are anonymous.

Round Based Mixers

Examples: CoinShuffle, TumbleBit, Chaumian CoinJoin (Wasabi Wallet)

Post-Transaction Coin Control

Pre-Transaction Coin Control

In Wasabi Wallet we did not implement Coin Control Suggestions. Why? Because we implemented mandatory traditional coin control that can be used to achieve the same things and more those can be done with a post-transaction Coin Control feature. While coin control suggestions would still be beneficial for less experienced users, it is even more beneficial for them if we don’t overcomplicate the user interface. We must be very careful to build a great UX and a post-transaction coin control would add significantly to the clutter. That being said, we are constantly thinkering on how could we do this in a less intrusive way. So how does coin control looks like in Wasabi wallet?

Conclusion

There is a lot more to be said AND TO BE EXPERIENCED about coin control, but I hope I was able to convince you about the importance of it. The importance of you being in control of what happens in your wallet:

If you don’t control your bitcoins, your privacy is out of control, too.

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