How CoinJoin Works in Wasabi Wallet
When choosing the best crypto wallet, people often forget about privacy. A standard blockchain wallet hides nothing: if someone decides to track blockchain transactions, they can easily view your entire transfer history.
To achieve true financial anonymity, you need a specialized coinjoin wallet. Wasabi Wallet provides this capability through advanced cryptographic mechanisms.
What is CoinJoin?
CoinJoin is a method of combining multiple crypto transactions from different users into one massive, single transaction.
By blending your wasabi crypto assets with dozens of other users, you receive coins on the output that are completely stripped of their previous digital footprint.
The Illusion of Bitcoin Anonymity
The blockchain is a completely public ledger. When you send a standard transaction, the network permanently records the explicit link between the inputs (where the money came from) and the outputs (where it went). To break this deterministic chain and conceal your footprints, you must utilize coin mixing technology.
How the WabiSabi Protocol Works
Wasabi Wallet is powered by WabiSabi – a next-generation mixing protocol that allows users to seamlessly mix arbitrary (even fractional) amounts of Bitcoin. The entire process is fully automated and takes place in 5 distinct steps after you set up your wallet:
- Input Registration (Tor & Alice): Your wallet generates a new, completely isolated identity within the Tor network (referred to as Alice) for each input. Alice proves ownership of the coins to the coordinator server without exposing your real-world identity.
- Connection Confirmation: The coordinator server verifies that all registered participants in the pool are online, stable, and ready to proceed.
- Output Registration (Blind Signatures & Bob): The wallet creates brand-new Tor identities (Bob) to register clean receiving addresses. Thanks to advanced Blind Signatures cryptography, the server cannot link Alice’s inputs to Bob’s outputs. You do not have to trust your data to the software creators – they physically cannot de-anonymize you.
- Signing: All participants cryptographically sign the collective joint transaction.
- Broadcasting: The finalized transaction is broadcast securely over Tor to the Bitcoin network.
If any participant drops out or disconnects during the signing phase, the system automatically triggers a so-called Blame round, effectively excluding the offender and safely restarting the process.
Mixing Strategies and Fees (Coinjoin Strategy)
Starting from version 2.2.0.0, Wasabi has completely eliminated coordinator fees. You only pay standard network mining fees for the block space your transaction uses.
Important Technical Note: In rare cases, a tiny “change” leftover (maximum of 10,000 satoshis per coinjoin) may go to the coordinator. This is a strict technical necessity: creating micro-outputs would severely harm privacy, and the network fee to spend them later would end up costing more than the amount itself.
Additionally, you can control your expenses by setting a customized Max Coinjoin Mining Fee Rate limit (the default is 150 sat/vB). If the Bitcoin network is highly congested and fees exceed your specified limit, the wallet will simply pause the process and wait for the mempool to clear.
For user convenience, the wallet settings offer three predefined configurations (Coinjoin Strategy):
⚖️ Default Strategy
The ideal, recommended balance between processing speed, mining fee costs, and achieving a high level of financial anonymity.
🛡️ Enhance Privacy
Maximum privacy mode. The algorithm will continue mixing coins in multiple rounds until it achieves the highest possible Anonymity Score, even if it takes more time.
📉 Reduce Costs
Optimized for minimal expenses. Mixing rounds only occur during periods when transaction fees on the Bitcoin network drop to their lowest values.
By default, the wallet has a built-in automatic Stop coinjoin threshold set to 0.01 BTC. If your confirmed wallet balance falls below this limit, the wallet will not automatically trigger the mixing process, preventing you from overpaying mining fees for small amounts of Bitcoin.