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1 sat \ 1 reply \ @nout 28 Feb 2022 \ on: An alpha version of my coinswap project is released! bitcoin
I wonder how will this be adapted to taproot? I'm assuming taproot would make the implementation easier.
Taproot makes the implementation more elegant and private using adaptor signatures: https://bitcoinops.org/en/topics/adaptor-signatures/
Alice wants to swap coins with Bob.
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Alice creates a hidden value. Using that value, she creates an adaptor signature (which is like an incomplete signature with a built in commitment to that hidden value).
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Alice gives Bob the adaptor signature and an unsigned transaction to her coins. Bob doesn't know the hidden value.
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Bob uses the built in commitment in Alice's adaptor signature to create his own adaptor signature and unsigned transaction to his coins.
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Alice combines the hidden value and Bob's adaptor signature to create a signature for Bob's unsigned transaction. Now she can spend Bob's coins.
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Bob can take the signature from the transaction Alice made and derive the hidden value from that signature.
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He can use that hidden value with the adaptor Alice gave him to sign the transaction for Alice's coins. Coin swap complete!
These transactions make it look like Alice and Bob are making normal taproot Bitcoin transactions when really they're swapping coins. If there are a lot of taproot transactions going on, it gives Alice, Bob, and every other taproot user plausible deniability through a big anonymity set.