Wasabi vs Samourai, the privacy war

Proponents of Samourai and Wasabi wallets continue to shoot each other in the paws. Where does this melodrama come from?

Privacy War

Originally, this dispute stems from the fact that Bitcoin is not private by default. The transaction history is accessible to everyone, so you have to know how to use tricks to preserve your anonymity.

Samurai wallets and Wasabi (created by the company zkSNACKs by Max Hillebrand) are both very popular as cover stories. However, a rivalry has developed. In question, a philosophical divergence on the best way to anonymize bitcoins.

The Rubicon was crossed last month, when Trezor unveiled its privacy tool (coinjoin) in partnership with Wasabi. Our article on this announcement: Trezor and Wasabi spark controversy.

Samourai defenders are appalled by the decision of zkSNACKs to use the firm Chainalysis to sort out BTC from criminal activities (exchange hack, ransomware, etc).

Samourai is of the opinion that coinjoins should be used to “smear” all BTC. If all wallets played the game, exchanges would ultimately be forced to accept all BTC, regardless of their origin.

Max Hillebrand is responsible for filtering transactions blacklisted by Chainalysis (and OFAC). “There is no incompatibility with my anarchist cypherpunk philosophy”he said last month.

For him, everyone should have the opportunity to preserve their anonymity without risking ending up at the exit of a coinjoin with BTC from criminal activity. Not to mention some pressure from the authorities:

“Yes, I have a question, Max. Has your company ever been pressured by a government or regulator to hire a monitoring company to screen incoming UTXOs for your coinjoin? In other words, did you give in to the pressure, or did you just decide to over-conform? »
“YES”

Wasabi admits that this decision is, on balance, “undesirable”but believes that it is “a small price to pay for the future of bitcoin privacy.”

pax anonymity

A parody article published on The Bitcoin Bugle imagine how both factions could have buried the hatchet. These two imaginary statements are particularly funny:

[Max Hillebrand a déclaré : « J’ai dépensé beaucoup trop d’énergie à me disputer avec les trolls de Samourai. Je suis heureux de concentrer mes efforts sur l’amélioration des technologies de protection de la vie privée au lieu d’embrouiller les gens dans des querelles insensées sur Twitter ».

Le cofondateur du coinjoin de Samourai BTCxZelko a répondu : « J’ai eu ma dose d’attaques contre les gars de Wasabi et je suis prêt à laisser tout ça derrière moi ».]

Seriously, here are excerpts from the recent communicated from Samurai:

“In my opinion, the debate ended the day Wasabi decided to use Chainalysis to restrict access to their coinjoin.

Before that, the debate revolved around technical aspects such as deterministic links or the entropy of transactions. We felt our solution was superior and wasabi did the same with theirs.

For me, the red line has been crossed. Ithe debate is over. Our raison d’être stems from our desire to systematically dismantle all the heuristics on which firms like Chainalysis rely. It is unthinkable to associate with the sworn enemy.

[…]

The normalization of chainalysis’s incursion into wallets is an unthinkable and unwarranted ceding of territory. No regulatory requirements, no legislative requests, nothing.

I can’t say what the future of privacy holds, but I can say that we have a very comprehensive roadmap with a focus on decentralizing coinjoin coordination and introducing new types of transactions directly targeting the heuristic on which surveillance firms rely. »

The success of Trezor and Wasabi’s coinjoin, however, suggests that their decision isn’t entirely unwarranted…

What is a CoinJoin?

Best is to watch Wasabi’s crystal clear video. Ultimately, a coinjoin is simply a transaction to cover the tracks because it has a very large number of participants:

“Have you heard of Coinjoins but still don’t know how they work?
Watch our short explainer video about WabiSabi coinjoins »

Here’s what happens during a coinjoin. Each participant connects to the zkSNACKs coordinator server to record their inputs and outputs before signing the transaction.

Once a sufficient number of participants have joined the coinjoin, the coordinator builds the transaction relying on partially signed transactions (PSBT). This allows participants to never lose control of their BTC.

Normally, if the coordinator does things right, he should be unable to de-anonymize the spouse afterwards. This is claimed by zkSNACKs, Wasabi and Trezor.

Before going any further, note that any bitcoin transaction has an amount, an input and an output. Input and output are often described as the addresses from and to which BTC is sent. Truth be told, we have to talk about UTXO. Instead, addresses are public key encodings.

There are approximately 80 million UTXOs. The nodes keep them in memory in order to determine exactly what BTCs exist and who can spend them. During a transaction, several UTXOs make up the input. The latter “merge” and give new UTXOs in output.

Now that we said that, why does the zkSNACKs coordinator claim that he cannot de-anonymize his coinjoins?

The small techniques of ZkSNACKs

The data relating to UTXO collected by the coordinator is limited to that which is publicly known. How ? Thanks to the protocol of Wasabi Wallet 2.0 (Wabisabi) on the one hand, and the Tor network on the other hand.

Wasabi provides participants with anonymous identifiers to record their inputs and outputs. This protocol makes input-to-input, input-to-output and output-to-output links impossible.

Also, populating each input/output is done with a new Tor identity. It is therefore impossible for the coordinator to cross-reference the IPs of the participants in order to possibly de-anonymize the coinjoin.

“What is the precise role of Tor in the Wasabi Wallet coinjoin? »

In addition to offending the IPs to the coordinator, Tor is by default pre-configured to access the Bitcoin network anonymously with the Wasabi wallet.

This helps prevent snooping by chainalysis nodes. Coindesk had indeed revealed in 2021:

“Chainalysis runs a series of nodes on the Bitcoin network. Users reveal their IP address and all wallet addresses as soon as they connect to these nodes. »

This is why you should always connect to the Bitcoin network using the Tor browser. Chainalysis watches over your identity…

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