CoinSwap

CoinSwap is a proposed bitcoin privacy protocol in which two parties exchange coins through transactions that never appear connected on the blockchain. Gregory Maxwell outlined the idea in 2013. Unlike CoinJoin, where participants visibly share one transaction, a completed CoinSwap looks like ordinary unrelated payments, offering a stronger form of deniability.

Why it matters

CoinJoin transactions have a recognizable fingerprint, many inputs and equal-sized outputs, so observers know privacy tools were used even if they cannot unravel them, and some services discriminate against coins with that history. CoinSwap's promise is invisibility: because the swap resembles normal payments, it protects not just the link between sender and receiver but the very fact that anything unusual happened. Widespread use would degrade chain analysis everywhere, since any ordinary-looking transaction could be half of a swap.

How it works

Two parties lock coins in separate contracts and exchange them atomically: cryptographic conditions ensure that either both sides can claim their new coins or neither can, so no one can be cheated. Early designs used hash timelocked contracts, while later work applies adaptor signatures, which leave no visible script on the chain. With Taproot, activated in 2021, such contracts can be indistinguishable from ordinary single-signature spends. Production implementations remain limited, and the design is still an active engineering frontier.