Subject: [bitcoin-dev] Tainting, CoinJoin, PayJoin, CoinSwap

From: nopara73 <[email-masked]>
Date: Wed, 10 Jun 2020 14:32:05 +0200

The problem with CoinJoins is that desire for privacy is explicitly
signalled by them, so adversaries can consider them "suspicious." PayJoin
and CoinSwap solve this problem, because they are unnoticeable. I think
this logic doesn't stand for scrutiny.

>From here on let's use the terminology of a typical adversary: there are 3
kinds of coin histories: "clean", "dirty" and "suspicious".
The aftermath of you using a "dirty" coin is knocks on your door. You using
a "suspicious" coin is uncomfortable questions and you using a "clean" coin
is seamless transfer.

In scenario 1, you start out with a "clean" history. By using CoinJoins you
make your new coin's history "suspicious" so you have no incentive to
CoinJoin. By using CoinSwap/PayJoin your new coin can be either "clean" or
"dirty". What would a "clean" coin owner prefer more? Take the risk of
knocking on the door or answering uncomfortable questions?

In scenario 2, you start out with a "dirty" history. By using CoinJoins you
make your new coin's history "suspicious" so you have an incentive to
CoinJoin. By using CoinSwap/PayJoin your new coin can either be "clean" or
"dirty". What would a "dirty" coin owner prefer more? And here's an
insight: you may get knocks on your door for a dirty coin that you have
nothing to do with. And you can prove this fact to the adversary, but by
doing so, you'll also expose that you started out with a "dirty" coin to
begin with and now the adversary becomes interested in you for a different
reason.

You can also examine things assuming full adoption of PJ/CS vs full
adoption of CJ, but you'll see that full adoption of any of these solves
the tainting issue.

So my current conclusion is that PJ/CS does not only not solve the taint
problem, it just alters it and ultimately very similar problems arise for
the users. Maybe the goal of unobservable privacy is a fallacy in this
context as it is based on the assumption that desiring privacy is
suspicious, so you want to hide the fact that you desire privacy. And the
solution to the taint issue is either protocol change or social change
(decent adoption.)

PS.: Please try to keep the conversation to the Taint Issue as this email
of mine isn't supposed to be discussing general pros and cons of various
privacy techniques.

Any thoughts?

-- 
Best,
Ádám