Schnorr signature and its privacy concern.

[Floxynice]

I was reading about Schnorr signature under the Taproot upgrade, and learnt that it permits the aggregation of multiple signatures into a single signature in a multiSig transaction. This is meant to reduce the transaction size which could lessen the transaction fees.

It didn't actually end here. Another thing that interests me about Schnorr signature is that it is said to improve privacy. It does this by making multi-signature transactions look like a single signature transactions. This in turn makes the transactions hard to track or distinguish in the blockchain analysis. Thereby increasing the privacy of the multi-signature users.

With this basic understanding, should we expect that as Schnorr signature keeps evolving, we might one day not have the need for mixers to protect our privacy?

[MusaMohamed]

I was reading about Schnorr signature under the Taproot upgrade, and learnt that it permits the aggregation of multiple signatures into a single signature in a multiSig transaction. This is meant to reduce the transaction size which could lessen the transaction fees.

I can not explain it for you by myself but hopefully this thread of HusnaQA can help you.

[Education] Bitcoin Privacy and Anonymity
➥ 11. Schnorr Signature

[NotATether]

It didn't actually end here. Another thing that interests me about Schnorr signature is that it is said to improve privacy. It does this by making multi-signature transactions look like a single signature transactions. This in turn makes the transactions hard to track or distinguish in the blockchain analysis. Thereby increasing the privacy of the multi-signature users.

You cannot retrieve a public key of the address from a Schnorr-signed transaction, and also you can't infer the type of script being ran in a transaction spending Taproot outputs, because those are hashed (i.e. hidden) before being broadcasted to the blockchain. That's how Schnorr improves privacy.

The 'multisig transactions look like single-sig' you're talking about is the result of the transaction using a Tapscript instead of plainly storing them in the ScriptPubKey.

With this basic understanding, should we expect that as Schnorr signature keeps evolving, we might one day not have the need for mixers to protect our privacy?

Schnorr signatures will not prevent blockchain analysis from finding out that you are moving coins from address A to address B. These two technologies are on two different layers of privacy.

[_act_]

With this basic understanding, should we expect that as Schnorr signature keeps evolving, we might one day not have the need for mixers to protect our privacy?

Schnorr signatures will not prevent blockchain analysis from finding out that you are moving coins from address A to address B. These two technologies are on two different layers of privacy.

He is not talking about now but if Taproot can be developed into acting as something like a mixer in the future. I have read in the past that bitcoin developers can make Taproot transactions to like coinjoin. But I do not think this is what the developers want it to be. Even it is developed in a way that only singlesig wallets are having Taproot wallets, instead for the developers to make Taproot multisig wallets which will still have the same fee. I do not know why Taproot should have being for singlesig instead of multisig when the multisig will still function like singlesig with same transaction fee.

[NotATether]

He is not talking about now but if Taproot can be developed into acting as something like a mixer in the future. I have read in the past that bitcoin developers can make Taproot transactions to like coinjoin. But I do not think this is what the developers want it to be. Even it is developed in a way that only singlesig wallets are having Taproot wallets, instead for the developers to make Taproot multisig wallets which will still have the same fee. I do not know why Taproot should have being for singlesig instead of multisig when the multisig will still function like singlesig with same transaction fee.

What you are talking about (coinjoin, mixer) is a different approach to what Taproot is trying to do.

Taproot is trying to (eventually on a large scale) support multiple parties sending their own coins using the same address.

Whereas Coinjoins are when you take multiple normal addresses and make many of them inputs and outputs.

Commercial software already recognizes most kinds of coinjoins and considers them to be of the 'mixer' category. It would be different for Taproot as everything would be encoded in one transaction but said transaction would have to be created with special software since none of the existing wallets such as Core, Sparrow support that yet (without jumping through hoops).

In the context of mixers, because of the few number of software that is capable of creating them, these sort of taproot transactions can easily be fingerprinted to a particular wallet and possibly even OS version if it is not cross-platform.

I guess Taproot multisig sort of acts like a good mixer for now, but only because it's not being used widely so BA hasn't bothered to update its rule engines for it. That also means that unlike coinjoin, you're going to have a hard time finding strangers for doing a multisig taproot transaction. Unless somebody updates Joinmarket to support this kind of mode I guess.

[Floxynice]

With this basic understanding, should we expect that as Schnorr signature keeps evolving, we might one day not have the need for mixers to protect our privacy?

Schnorr signatures will not prevent blockchain analysis from finding out that you are moving coins from address A to address B. These two technologies are on two different layers of privacy.

Ok, this is where I got it wrong. I'm learning and asking, sometimes my questions may appear dumb. But I know the forum and its members can accommodate.

[Reatim]

With this basic understanding, should we expect that as Schnorr signature keeps evolving, we might one day not have the need for mixers to protect our privacy?

Schnorr signatures will not prevent blockchain analysis from finding out that you are moving coins from address A to address B. These two technologies are on two different layers of privacy.

Ok, this is where I got it wrong. I'm learning and asking, sometimes my questions may appear dumb. But I know the forum and its members can accommodate.

To be fair, Schnorr and Mixers can be complementary. Using the two of them may provide you with enough privacy but as explained Schnorr does not obscure the path from where your funds were sent to where it will be received. But hiding multisig into one and using a mixer may make it harder to analyze or trace the path of your funds.

Since Schnorr also helps to reduce transaction size, your fee when using mixers might be reduced as well. However using them both should allow you to consider a few things such as convenience and regulatory compliance. So use at your own risk.