Bitcoin's mixed-currency deal.

Mixed-Currency Trading (coinjoin), in the end is a few unrelated people, put the unrelated transactions into a transaction, then the outsider, it is not known exactly which input corresponds to which output, so it is not accurate to know who paid for what. The purpose of the mixed-currency transaction:

By querying the block chain, your counterparty (who has paid you before) has your Bitcoin address, you can see where you spend your money, how much you spend, how much you have left, and even your other bitcoin addresses.

So, every time you change the address, you can only increase the complexity of the analysis of the other side.

So, if a wants to protect his privacy, the vast majority of people can not see where a put the money, how much, how much, there is the use of mixed-currency transactions.

The process of mixed-currency transactions:

1. A through the anonymous services such as Tor, in the IRC chat room to meet the b,c and other people, they also have a similar need for privacy.

2. Each person in the wallet finds the utxo containing the equivalent amount of bitcoin (such as 100mBTC) and creates a new public key of its own.

3. BC Hashes the UTXO information and public key to a (in this case, A is the organizer and is anonymous).

4. A constructs a transaction that takes all the utxo as input (a total of 300mBTC) and then evenly points the output to ABC's public key hash.

5. A sighash_all mode is used to sign the utxo provided by a, and then to B; b the same signature, and then to C; c the same signature, and then it can be posted to the public network for everyone to see.

So, in addition to ABC, no one can tell exactly which output is whose, also can not track the consumption after. If a large number of mixed-currency transactions, will greatly improve the difficulty of tracking.

Note: If the tracker is willing to take the time to make a single sweep, you can still find out what A's consumption is, so it's just relative privacy.

In addition, an alternative is to stay in the chat room, wait for the other purchase needs of B (spending purposes, money, opponents can be different), and then construct a mixed transaction, can also let the third party can't tell who paid to where. This saves the cost of the mixed-currency transaction, even as the combined transaction saves the byte count and reduces the transaction costs that would otherwise have been needed.

In practical applications, the real idea of mixed currency is mainly the users of some illegal transactions, most of them will use the so-called dark net mixed currency.

This kind of currency mixer not only mixes a large number of legal and illegal transactions, but also uses deferred transactions, such as the nth transaction, which is used to pay for the N-1 transaction, and the input of the n+1 transaction is used to pay the amount of the nth transaction.