Cryptocurrency Hardware Wallet Firm Trezor Is Extending Bitcoin's Privacy, Transact by partnering with the privacy-focused Wasabi Wallet.
Trezor has launched a privacy-enabled CoinJoin feature on its hardware wallet, allowing users to enhance the privacy and security of Bitcoin transactions. In an announcement on April 19, Trezor noted that the new feature will be available immediately on the company Model's T wallet Trezor . The company plans to enable the CoinJoin option for its first hardware wallet, the Model One, in the near future.
CoinJoin is a process used to anonymize Bitcoin transactions, enabling users to send their BTC as part of a larger coordinated transfer and obfuscate transaction histories. Introduced in August 2013 by former Bitcoin Core developer Gregory Maxwell, the method provides an option to acts on BTC privately. Trezor's new partnership with Wasabi enables the CoinJoin option on its wallet and allows users to hide their transactions and balances when purchasing, donating, and making other transactions with Bitcoin.
In order to enable CoinJoin, users need to open a new CoinJoin account on the Trezor main menu. A selection of new CoinJoin features are available with other account types, including Segregated Witness (SegWit) and Bitcoin Taproot accounts.
For maximum privacy, the CoinJoin feature on the Trezor also prompts users to allow the anonymous communication protocol Tor. "Coinjoin in Trezor is optional, and if users want to use this feature, they must first send their coins to a specific CoinJoin account. If users choose not to use CoinJoin, nothing changes for them," Trezor's Bitcoin Analyst Josef Tetek,
Since Coinjoin supports more privacy, coinjoin transactions are more expensive because they require users to pay a coordinator fee, Tetek said, noting: “Users also pay a 0.3% coordinator fee and mining fee when entering CoinJoin. Remixes – further CoinJoin no rounds – have coordinator fee. There are no additional fees when spending coinjoined outputs.”
Unlike coordinator fees, mining fees are charged with any other Bitcoin transaction. Therefore, users must pay mining fees for each round of CoinJoin. In addition to fees, the CoinJoin feature is associated with longer transaction times. Setting up federated account take discovery individually may longer than regular account discovery due to downloading the entire block and using a slower connection over Tor. “The CoinJoin process itself can take several hours. Afterwards, the output can be spent in the same way as any other Bitcoin output,” Tetek said.
Trezor CEO Matěj Žák emphasizes that Trezor views privacy as an individual's most important asset. “So we're glad we found a way for our community to keep their Bitcoin history private,” he noted. According to the company, Trezor is the first hardware wallet to implement CoinJoin, following in the footsteps of software wallets such as Wasabi.
