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add to the introduction and more about the Tumbler

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joinmarket/joinmarket_private_flow.md
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# A private flow through JoinMarket
Guidance to get started with sending bitcoin through the JoinMarket wallet following basic good practices.
Bitcoin privacy starts on the base layer where cooperative transactions with equal amount outputs - known as coinjoins - are used.
This document aims to provide an introduction to using JoinMarket, a decentralized, liquidity market based coinjoin implementation following basic good practices.
## Common definitions
### Mixdepth
* one of the accounts in the joinmarket wallet
* abbreviated to m0 / m1 / m2 / m3 / m4
* all are derived from the same BIP32 compatible HD seed
* One of the accounts in the JoinMarket wallet.
* Abbreviated to m0 / m1 / m2 / m3 / m4
* All are derived from the same BIP32 and BIP39 compatible HD seed.
### Sweep
* it means sending one or multiple utxos without creating change
* it is achieved by sending all utxos (except the ones frozen) from an account
* the amount is not fixed and fees come off the sum of the inputs
* It means sending one or multiple utxos without creating change.
* It is achieved by sending all utxos (except the ones frozen) from an account.
* The amount is not fixed and fees come off the sum of the inputs.
### Status labels
* applied automatically by JoinMarket via a simple transaction analyses
@@ -23,18 +24,20 @@ Guidance to get started with sending bitcoin through the JoinMarket wallet follo
#### `reused`: a utxo on an address which has been used previously
### Orderbook
* Any platform collecting the public orders of the peers
* Any platform collecting the public orders of the peers.
* General docs on the order book (including how to run without Bitcoin Core): https://github.com/JoinMarket-Org/joinmarket-clientserver/blob/master/docs/orderbook.md
* a public example: <https://nixbitcoin.org/orderbook>
* A public example: <https://nixbitcoin.org/orderbook>
### Minimum size to coinjoin
* the default is 100k sats (+/-10%) so that is a safe choice.
* on the example below offers start at 6 peers offering min 27300 sats.
* The default is 100k sats (+/-10%) so that is a safe choice.
* On the example below offers start at 6 peers offering min 27300 sats.
* Running the Tumbler would require to start with a higher amount as the fees can take up a significant portion.
### Maximum size to coinjoin
* the max amount offered is limited by the wallet of each Maker
* it is the highest amount in one single mixdepth (-0-10%)
* multiple bitcoin amounts are offered by several (10+) peers
* on the example below 21 peers offer 19+ BTC
* The max amount offered is limited by the wallet of each Maker.
* It is the highest amount in one single mixdepth (-0-10%).
* Multiple bitcoin amounts are offered by several (10+) peers.
* On the example below 21 peers offer 19+ BTC
### Screenshots taken from <https://nixbitcoin.org/orderbook> in March 2022.
* Click the top of the line to order by it's attribute
<p align="left">
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## The flow of funds
Guidance is provided in the behaviour of the Tumbler script which could be used for the quickest result.
Discussed in:
* https://gist.github.com/chris-belcher/7e92810f07328fdfdef2ce444aad0968
* https://github.com/JoinMarket-Org/joinmarket-clientserver/blob/master/docs/tumblerguide.md
* https://joinmarket.me/blog/blog/the-445-btc-gridchain-case/
* First need to state that [one single coinjoin doesn't improve privacy much](https://github.com/JoinMarket-Org/joinmarket-clientserver/issues/1047#issuecomment-944995635).
* Participating in more coinjoins is essential. Find below the two main ways to achieve this.
## Running the Tumbler
* Using the Tumbler is a higher time preference option and usually is the best tool to use if the funds are needed in the near future - it can take multiple hours, up to days.
* Multiple coinjoins are sent through the accounts including sweeping transactions at the start and at the end.
* Breaks up the deposited amounts and sends to at least 3 final addresses without leaving change behind.
* For the best outcome avoid merging between the final addresses.
* The initiator acts repeatedly as a Taker and [pays all the miner and coinjoin fees](https://github.com/JoinMarket-Org/joinmarket-clientserver/blob/master/docs/tumblerguide.md#a-note-on-fees);
* It is implemented in the JoinMarket-QT GUI and in the command line as the `tumbler.py`.
* For a detailed usage guide see:
* https://github.com/JoinMarket-Org/joinmarket-clientserver/blob/master/docs/tumblerguide.md
* Video demonstration of the Tumbler function in QT GUI:
* https://www.youtube.com/watch?v=hwmvZVQ4C4M&t=827s
* Discussed further in:
* https://gist.github.com/chris-belcher/7e92810f07328fdfdef2ce444aad0968
* https://joinmarket.me/blog/blog/the-445-btc-gridchain-case/
## Sending transactions manually and running the Yield Generator
### Deposit
* send to m0 - could be any of the accounts, but selected the first for simplicity
* deposit a single or multiple coins from a single funding source at a time
* select the newly deposited coin(s) with freeze/unfreeze if there are others in the account
* Send to a new address in m0 - could be any of the accounts, but suggesting using the first one for simplicity.
* Deposit a single or multiple coins from a single funding source at a time.
* Select the newly deposited coin(s) with freeze/unfreeze if there are others in the account.
### Sweep
* start with detaching the deposited coins from their history
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* there is no change created, so there is need to separate the `cj-out` from the `change-out`
### Send or participate in multiple coinjoins
* alternate being a Taker and a Maker for the best results
* stretch out in time
* the Taker acts as the coinjoin coordinator
* Stretch out in time to avoid timing analyses.
* The Taker acts as the coinjoin coordinator
* has the most privacy benefits
* pays the fees (miner and coinjoin fees)
#### The Taker role
* send coinjoins to the next mixdepth (acting as a Taker)
* when sending can merge multiple coins in the coinjoin by sending custom amounts or sweeping
* the Taker is the initiator and coordinator of the coinjoin - takes the liquidity on offer.
* Send coinjoins to a new address in the next mixdepth.
* In a coinjoin multiple coins can be merged by sending custom amounts or sweeping.
#### The Maker role
* activate the Yield Generator (Maker / Earn)
* to get selected more often it is best to have a a sizeable Fidelity Bond. See:
* The Makers are offering their coins to be used in coinjoins - market makers.
* Being a Maker can be thought of as providing a service, but also comes with privacy benefits.
* Activate the Yield Generator (Maker / Earn) to start.
* To get selected more often it is best to have a a sizeable Fidelity Bond. See:
* https://nixbitcoin.org/orderbook/fidelitybonds
* https://github.com/JoinMarket-Org/joinmarket-clientserver/blob/master/docs/fidelity-bonds.md
* as a Maker the coins will circle through the accounts automatically:
* As a Maker the coins will circle through the accounts automatically:
... m0 -> m1 -> m2 -> m3 -> m4 -> m0 -> m1 -> m2 -> m3 -> m4 ...
* only the `cj-out` propagates to the next account
* the `change-out` stays behind in the same account where the funding utxo was
* Only the `cj-out` propagates to the next account.
* The `change-out` stays behind in the same account where the funding utxo was.
### Leaving the JoinMarket wallet
#### When
* the more coinjoins the funds were through the better
* consider that the privacy benefit from coinjoins is breaking down with time as the peers are gradually exposed or clustered
* if deposited only to m0 and followed the steps above all coins in m4 must have been through at least 5 coinjoins
* in a long running, active Maker wallet some funds could have made multiple circles - there is no indication of this by default
* The more coinjoins the funds were through the better.
* Consider that the privacy benefit from coinjoins is breaking down with time as the peers are gradually exposed or clustered.
* If deposited only to m0 and followed the steps above all coins in m4 must have been through at least 5 coinjoins.
* In a long running, active Maker wallet some funds could have made multiple circles - there is no indication of this by default
#### How
##### Do
* can only send (merge coins) from one account at a time
* send to multiple separate destinations (separate wallets with different purposes - not to be merged later)
* sweep whole accounts or coins and don't leave change behind
* fund lightning nodes or send to cold storage via coinjoin(s)
* pay with Payjoin to BIP78 compatible wallets to obfuscate the amount sent <https://en.bitcoin.it/wiki/PayJoin_adoption>
* Can only send (merge coins) from one account at a time.
* Send to multiple separate destinations (separate wallets with different purposes - not to be merged later).
* Sweep whole accounts or coins and don't leave change behind.
* Fund lightning nodes or send to cold storage via coinjoin(s).
* Pay with Payjoin to [BIP78 compatible wallets](https://en.bitcoin.it/wiki/PayJoin_adoption) to obfuscate the amount sent.
##### Don't
* avoid sending out the whole amount which entered the wallet a few transactions ago all at once
* don't merge a change from a previous transaction when sending to a new destination
* Avoid sending out the whole amount which entered the wallet a few transactions ago all at once.
* Don't merge a change from a previous transaction when sending to a new destination.
## More Reading
* https://github.com/JoinMarket-Org/joinmarket-clientserver/tree/master/docs