Trezor users now have CoinJoin, but Ledger users now have Bling-bling.
On April 19th, Trezor, one of the most popular cold wallets in the crypto community, enabled a new privacy feature for its users through the CoinJoin security protocol.
The new update for Trezor is now available for Trezor Model T users, who simply need to add their CoinJoin account to enjoy the security benefits offered by the decentralized protocol.
CoinJoin Enhances Users’ Privacy and Anonymity
CoinJoin is an obfuscation method in which different wallet addresses perform organized an operation, combining their inputs into one single transaction, making it almost impossible for trackers to properly know the origin and destination of the funds held by each wallet. Trezor users will be able to hide their transaction history and wallet balance when making transactions.
The new implementation was made possible through a collaboration with the privacy-focused Wasabi Wallet, which is open-source and available for Windows, Linux, and Mac.
The decentralized mixing protocol CoinJoin is used to allow anonymity when conducting transactions, preventing recipients from reviewing the sender’s history.
To activate Trezor’s new update, users need to add their CoinJoin account in the main Trezor menu, where options for other accounts such as SegWit, Taproot, Legacy SegWit, and Legacy are also available.
The Downsides of Using Trezor’s New Update
Using CoinJoin requires a coordination fee, making transactions slightly more expensive. Therefore, those who want to enjoy greater security must pay a small usage fee of about 0.3%.
Trezor warned in their post that CoinJoin “is currently being publicly tested, so it comes with some warnings. Also, there are still ongoing improvements being made to the algorithm”, meaning sudden changes can be expected.
Additionally, it is worth noting that using CoinJoin may result in longer transaction times due to the mixing process.
They also recommend “to limit coinjoining to a maximum of 1 BTC to avoid creating too many UTXOs (unspent transaction outputs)”. This means that, for now, transactions will be limited to 1 BTC to prevent any errors.
Despite the few downsides of the new update, Trezor is making its mark on the ecosystem, becoming the first hardware wallet to implement the CoinJoin protocol.
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