Wednesday saw the release of the beta version of a new Bitcoin (BTC) wallet, focused on privacy. Wasabi Wallet is a ZeroLink compliant Bitcoin wallet, determined to restore BTC's fungibility and provide the highest possible privacy for users.

Bitcoin’s blockchain is public and all transactions, although anonymous, are visible to anyone. However, users who value their privacy when using a cryptocurrency and who trust Bitcoin the most from all other digital coins can now test Wasabi Wallet and see if it serves their needs.

Wasabi comes with several privacy features for Bitcoin

In short, Wasabi is a light wallet that runs without a full node and your transactions cannot be traced back to you by network analytics.

Wasabi wallet was created by software developer Adam Ficsor and was formerly known as HiddenWallet. It is the first product of his company zkSNACKs and is a Bitcoin wallet based on ZeroLink technology, a mixing technique researched jointly by Samourai Wallet and Wasabi. The newly rebranded wallet comes with some new features.

The wallet always uses the Tor anonymity network by default.

The ZeroLink technology defines its own mixing technique – Chaumian CoinJoin created by Gregory Maxwell in 2013 and based on Chaum Blind Signature Scheme. Wasabi uses Chaumian CoinJoin and enforces a 100-anonymity set. This means that to send a transaction a user will have to wait for 100 users to pool their Bitcoin together and send at once.

To explain it simply, Wasabi mixes your coins with the coins of other users before sending a transaction. Thus, it makes the work of blockchain analytic firms very hard to do because outside observers will not be able to distinguish the sender from the recipient in a transaction.

Right now, there are operators that do mixing services through centralized servers. In this case, the server becomes a honeypot for investigating agencies and maybe some of the operators are investigating agencies themselves. Wasabi avoids all that because it does not rely on a single point of failure.

Another feature Wasabi offers is “filtering”, which allows connecting addresses to users to be avoided. Most wallets now store a vast collection of wallet addresses, making it possible to link addresses to users and thus making it easy for analytics firms to guess how much money you have in your wallet. Wasabi, on the other hand, can check how much money you have in your wallet without connecting your addresses.

Wasabi’s fee for mixing is set at 0.3%, which is a lot less than some centralized services.

What is ZeroLink?

ZeroLink, a joint research venture between Samourai Wallet and Wasabi, aims to make Bitcoin fully private by giving Bitcoin users better fungibility and anonymity. Bitcoin is limited in respect to being fungible because, so far, none of the fungibility improvements address the privacy issues in full. ZeroLink ambitiously aims to tackle those concerns and protect users from privacy breaches. A full fungibility in Bitcoin will require every transaction to be indistinguishable from any other, meaning that your coins will not be worth less than other coins because they were used on a gambling site or darknet markets, for example. The goal of ZeroLink is to break all connections with other coins. Its creators state:

“The scope of ZeroLink is not limited to a single transaction, it extends to transaction chains and it addresses various network layer deanonymizations, however its scope is limited to Bitcoin's first layer.”

The idea is that even with off-chain protocols, which will provide privacy for all transactions at the second layer, there will always be a need for privacy at the first layer, because transactions will eventually settle there (on-chain).

The symbolic launch

The beta release of Wasabi wallet was scheduled for August 1, 2018 to coincide with the first anniversary of Bitcoin’s user activated soft fork (UASF). The wallets 1.0 stable release is scheduled for October 31, 2018, which is the 10-year anniversary of the Bitcoin Whitepaper. Obviously, the authors want to make a symbolic statement with the launch dates in the spirit of true cypherpunks who believe in Bitcoin and anonymity.

Other privacy-oriented wallets

Wasabi is not the only wallet that works on solving privacy problems. A similar project is the Samourai Wallet, whose developer also contribute to the ZeroLink technology.

Samourai is a light wallet found in 2015 and a leading privacy wallet with more than 10,000 installs on Android. It utilizes a function called ‘Ricochet’, which lets users add additional hops to a transaction before arriving at the destination.

Samourai has also other functions like ‘stealth mode’, which allows users to hide the application in case someone steals your phone. This way, the robber will not be able to find out that you have a Bitcoin wallet with some funds in it.

Also, the wallet allows for wiping the stolen device clean with a remote command and transferring all funds to another address.

Samourai plans to add a similar CoinJoin feature as Wasabi, called ‘Whirlpool’.

Another upcoming privacy-focused wallet is the Breeze Wallet developed by the Stratis team. They have shown interest in ZeroLink, but are waiting for a bit more maturity of the technology before possibly adopting it. On Wednesday, the beta version of the Breeze Mainnet, which should provide trustless and private transactions for Bitcoin and Stratis (STRAT), was released.