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BTC Multisign Wallet

#1

With the new BTC Portal we have got a lot of improvements. (https://we.incognito.org/t/introduction-to-a-trustless-non-custodial-bitcoin-bridge/)

I am wondering what happens to the BTC send to the adress?

In the solution before the BTC were transfered by the smart contract to a pool of all incoming BTC transactions. I think this adress was centralized.

How does it work now? I have seen that my coins are still on that adress. When will they be moved?

Lets say I send all my BTC via Incognito, will the smart contract than send the BTC to the other Incognito user?

With the solution before I think we had more “privacy” since there was a pool holding a lot of BTC. Now we have a specific adress for an account.

Is an account able to generate more than one adress?

#2

Tagging @0xkraken here as she deals with all things Portal and building bridges to other networks.

#3

Hi @cobo,
Let me answer this question for you.

Corresponding with each payment address of an Incognito user will be a unique shielding Bitcoin address and can only be spent when having enough signatures from beacon validators.

Each time coins are sent to this Bitcoin address (shielding), they will go to a coin pool. This pool is created by various users from various shielding Bitcoin addresses.

When a user wants to unshield Bitcoin, by our algorithm, the protocol will pick coins in that pool that are needed for the unshield transaction in the Bitcoin network.
So if you shield Bitcoin and unshield with the exact same amount after that, there will be a big possibility that the protocol won’t pick the same coins as you shielded before.

FYI: It also increases the privacy for Portal users when coins are got from multiple users and can sent to multiple receivers. You can read more details here.

4 Likes
#4

Isn’t that wrong for the new btc portal?

#5

I don’t understand that one.

#6

Thanks for trying to help me.

I still don’t get the point why privacy should increase if every shielding leads to the same adress?

Additionally to that those BTC will just stay at the adress and will not be mixed with others.

If you now shield BTC from different sources you will just have one BTC Adress for shielding :frowning:

#7

Let me simplify it.
Every shielding coins of all users go to a pool. And all unshielded coins of all users go from this pool.

1 Like
#8

Yes, maybe this is the most disadvantage of the new Portal. We are researching a new way that each user will have multiple shielding addresses.

1 Like
#9

But that is not true or dont we understand each other ?

I sent my BTC to shield. They are still lying on the smae adress. On the old portal they were moved to a pool with all other BTC

#10

Otherwise its a lack of privacy I would say since it is possible to connect all the incoming transactions etc …

#11

What is not true in my explanation.

Coins are still lying in your shield address is because the pool hasn’t picked your coin just yet.

In the old centralized bridge, the pool is one master bitcoin address. In the new protocol, the pool is multiple shielding addresses.
The more shield addresses for this pool. The more difficult to trace a transaction shield/unshield in Incognito.

Bitcoin transactions are traceable so move coins from your shield addresses to only one master address doesn’t help anything in privacy. It makes it worse. Instead of having a pool (one master address) that you can easily view in the Bitcoin network in the centralized bridge. You have a virtual pool that manage by Incognito validators. I think that is one of the most improvements that we offered in this version.

1 Like
#12

Ah now I understand!!

So to simplify things:

I shield BTC.
Shielded BTC stays in a wallet that is assigned to my account.
Network knows where and how many shielded BTC it has.
If someone unshields the network will automatically select a shielding adress to send BTC.
This last process is random so it can occur that my BTC inflow stays on the same wallet for couple of days or weeks or even years?

1 Like
#13

The network can select multiple shielding addresses to send BTC for each unshielding (depend on the unshielded amount). Other parts of your reply are absolutely correct!

#14

Got you thanks!!!

How is the decision making based? Not wanting to get to technical but is it completely random or how does it work?

Through the new design “mixing” is not possible any more right ?

#15

The choosing method of coins has to be satisfied these conditions: won’t make unshielding transactions stand out from other transactions in the Bitcoin network, the unshielding fee isn’t too high and can create multiple batches for unshield transactions at the same time. Yes, it is not random.

Bitcoin supports multi sender - multi receiver transaction type, so it is possible now and even in the future (all upgrades of Bitcoin are soft-fork). And the “mixing” contains a centralized manner. I prefer the term “CoinJoin” :smile:

1 Like
#16

Sweet thanks for your answer!!