“From here on out, people can’t say Bitcoin is not private anymore.”
That’s how veteran developer Adam Fiscor, now CTO and co-founder of the privacy tech startup Zksnacks, described the importance of the Wasabi Wallet, set to debut on August 1.
This desktop-friendly Bitcoin wallet, which can only be used with the anonymizing Tor browser, will be the first (relatively) mainstream light wallet to offer CoinJoin transactions, dispatching lots of transactions at once to obscure their sources.
First proposed by Bitcoin Core legend Gregory Maxwell in 2013, CoinJoin is one of the most prominent attempts to solve one of Bitcoin‘s greatest challenges: while addresses are pseudonymous, all transactions are publicly recorded on the blockchain, undermining user privacy.
While developers have been experimenting for years with improved anonymity models, Wasabi Wallet will finally make using CoinJoin as easy as flipping a switch.
Because these privacy tech projects generally avoid collecting data about their users for obvious reasons, it’s hard to determine how many people use privacy-oriented wallets. However, Samourai Wallet’s Android app, arguably the Bitcoin industry’s leading privacy wallet since the project was founded in 2015, has garnered at least 27,000 downloads.
The team behind Samourai also plans to implement a type of CoinJoin feature by the end of the year, called a Whirlpool cycle. So Fiscor added another unique feature to further distinguish Wasabi Wallet.
Most Bitcoin wallets actually have thousands of addresses inside, he said. But blockchain explorers like Blockchain.info can often detect that those unique addresses share a common source since the same wallet will send an explorer balance queries on all its addresses simultaneously, tipping the user’s hand that they belong to the same person.
“That’s what we want to avoid,” Fiscor said. To do so, he applied a so-called filtering solution first proposed by the Bitcoin developer known as Roasbeef, which Fiscor said enables the wallet “to query how much money is in your wallet in a way that you don’t connect your addresses together.”
With the filter, instead of pinging an explorer, “you can figure out which blocks in the blockchain you are interested in and you connect to a lot of Bitcoin nodes and get one block from one node,” Fiscor said. “So basically they cannot figure out which transaction you are interested in and they cannot make statistical guesses what this random guy who asks for a block from me wants to do with that block.”
Although funds are otherwise viewable on the blockchain itself, Wasabi will be the only wallet that obscures from nodes how much Bitcoin the total wallet holds. “No [other] light wallet queries the balance in a private way,” he said.
Beyond the Japanese motifs, the Samourai and Wasabi projects have a lot in common, both in terms of values and business models.
The most obvious commonality is the privacy focus. Speaking to why he’s so passionate about privacy, Fiscor said it’s critical to the success of a currency that any individual unit is as valuable any other, no matter where it’s been, telling CoinDesk:
“Fungibility is very closely related to privacy and anonymity. And we know this is a property of money, that this is a feature it needs.”
Likewise, the pseudonymous co-founder of Samourai Wallet, who goes by the initials SW, told CoinDesk his team views know-your-customer identity checks that connect Bitcoin wallets to users’ government-issued IDs or bank accounts, such as those implemented by platforms like Coinbase, as a “fundamental attack on Bitcoin and its users.”
These ideals have in turn shaped the two teams’ business models. They’ve both eschewed taking venture capital or raising money through an initial coin offering (ICO), two of the most popular fundraising methods for blockchain projects.
“My co-founder and I come from very well-funded, by VCs, companies in the crypto space. And that’s not something we wanted to replicate,” SW said, adding that ICOs are “a good way to distract yourself from building a good product.”
Rather, both Fiscor’s recently founded Zksnacks startup, incorporated in Gibraltar, and the un-incorporated Samourai Wallet project were self-funded until launch then accepted Bitcoin donations to expand the team to roughly five people each.
Fiscor said self-funding allowed him to stay independent. In fact, Fiscor is so confident users want Wasabi’s CoinJoin feature that charging 0.3 percent per mixer transaction is the startup’s sole source of revenue. He told CoinDesk:
“We’re actually expecting to have a lot of income, so we’re not selling out.”
Meanwhile, economist Bálint Harmat, co-CEO of Zksnarks, agreed with SW about prioritizing the product instead of trying to make a quick profit or generate buzz.
“At first we want to make sure that the wallet is…