And in fact, we've seen that there have been a lot of closures
of these exchanges and services and so there's good reason for believing that
if you put all your trust in an online service, you might simply lose your money.
Okay, so having rejected online wallets as an anonymity solution, let's
turn to these dedicated mixing services that I told you a little bit about.
Before looking at their details, let's talk about the terminology a little bit.
I like to call it a mix.
Some people call it a mixer.
These are really the same thing.
Some people also call them laundries.
I don't like this term at all and the reason for this is that
it needlessly attaches moral meaning to something that's a purely technical term.
As we've seen earlier, there are very good reasons why
you might want to protect your privacy in Bitcoin and
use mixes for entirely good reasons for everyday privacy.
Of course, we must also acknowledge the bad uses, but it seems a little bit
weird to me to use the term laundry that implies that your coins are dirty and
you need to clean them and attaching a negative moral value to the whole
thing and for that reason, I'm not going to use that term in this lecture.
We'll go with the technically neutral term, which is mixing.
So in talking about mixing, there are several of us,
about six of us that got together, researchers at Princeton, Concordia, and
Maryland, including all four of us who are doing this on-line lecture series and
analyse the existing mix ecosystem and proposed a series of changes for
improving the way that mixes operate both in terms of anonymity and
the trustworthiness of mixes.
So let's look at those principles.
Before I show you those principles,
as a quick reminder at a very fundamental level, how does a mix operate?.
It asks for an address at which you want to receive bitcoins, and it gives you
an address to send bitcoins to the mix and then you both execute that transaction.
It's a swap, basically.
In a second, I'll show you what that looks like visually.
But what were our principles for running these mixes properly?
Well, the very first one is that you might wanna use a series of mixes
instead of just a single mix and this is a very well known principle.