Security researchers from Boston University, George Mason University and North Carolina University have jointly developed a new system for Bitcoin transaction which according to them is very hard to track. They named the new protocol as TumbleBit and claimed that it has more superior Bitcoin mixing service as compared to the previous one. The bitcoin mixing service is responsible to anonymous bitcoin transaction and hiding the identity of parties involved in the transaction. In bitcoin mixing service, multiple techniques are used such as breaking the large transaction in smaller ones, transaction delays or executing multiple smaller transactions in once. This is probably the best way of anonymity transactions.
The bitcoin method which was used till now has some downside as well. There have been many cases where clues were left in the public bitcoin blockchain and expose the real transaction there also been some cases where bitcoin mixing service has broken the users trust and stolen funds from them. Now with this newly developed bitcoin transaction method called TumbleBit, the bitcoin transaction is split in three different phases.
First Stage: User A tells the mixing service to make payment but doesn’t give the senders address. Simultaneously, User B tell the mixing service that is waiting to receive the payment without telling from who.
Second Stage: User A sends the money to the mixing service and this transaction is not recorded on the blockchain.
Stage Three: A serious of Cryptographic puzzles is solved between user A and user B. User B receives his money and while the unused funds is refunded to User A by mixing service refund.
Benefits of Using Tumblebit (New System for Bitcoin Transaction)
If you see the mechanism of Tumblebit as mentioned above, you would notice that only stage one and three are recorded in public blockchain while stage two is fully executed on Tumblebit protocol. There is no revealing that which user paid to whom and this is even not known to mixing service provider. Secondly, the recipient is transferred a share of money by the mixing service and this confuse the third-party observers. They will get confused to notice that money is going forward and backward between the two parties. Furthermore, there is a delay in executing the third step and suddenly execute them all in a one go. So, it is impossible for the observer to link Bitcoin transfers on the basis of timestamps. So, now user can now remain anonymous with this new Tumblebit Bitcoin transaction.