Although Satoshi Nakamoto’s white paper suggests that privacy was a design goal of the Bitcoin protocol, blockchain analysis can often break users’ privacy. This is a problem. Bitcoin users might not necessarily want the world to know where they spend their money, what they earn or how much they own, while businesses may not want to leak transaction details to competitors — to name some examples.
But there are solutions to regain privacy, like CoinJoin. Some of the most popular mixing solutions available today use this trick, including Wasabi Wallet (which leverages ZeroLink) and Samourai Wallet (which leverages Whirlpool). In both cases, users chop their coins into equal amounts to mix them with each other. Using equal amounts is considered a crucial step for the mix to be effective.
However, a new mixing protocol called CashFusion, in development for the Bitcoin Cash network, challenges this assumption. The developers behind the protocol claim that CashFusion offers privacy through CoinJoins without the requirement to only mix equal amounts. If true, this might drastically change how we think about privacy in Bitcoin as well.
Let’s start at the beginning. (Or skip this part if you know what CoinJoin is.)
A typical bitcoin transaction has one or several inputs (basically the addresses coins are sent from) and one or several outputs (basically the addresses coins are sent to). If a transaction has more than one input, it’s usually because the sender used several chunks of his coins (UTXOs) to get to the required amount. If a transaction has more than one output, it’s usually because several people are being paid at once (a batched transaction) and/or the payer is sending money back to one