What Is A CoinJoin?

CoinJoin is a Bitcoin transaction method that merges multiple payments from various senders into a single transaction, enhancing privacy by obfuscating the link between spenders and recipients. In simple terms, multiple participants join their coins, temporarily combining them to form one transaction, and then receive an equal amount back, making it difficult to trace the transaction path to any individual. This process can help users regain lost privacy by scrambling transaction paths, thus challenging any direct association between their Bitcoin usage and identity. However, multiple CoinJoins or participation with many users is recommended to maintain optimal privacy. Importantly, no third party takes custody of the funds during this process.