A new technology called Snowball allows for offline and private bitcoin transactions using Bluetooth. The need for this technology comes from the idea that governments and internet service providers can still block access to the internet. That's why developers Benjamin Woosley and Justin Moon are working on a Bluetooth-based network called Snowball, to allow private, offline bitcoin transactions.
Sending bitcoin without internet
Woosley and Moon want to allow bitcoin payments without the need for an internet connection. This would mean that people can also use bitcoin when the government has closed the internet, or when wireless networks are out of reach.
The technique they used is based on CoinJoins. This technology basically scrambles multiple transactions to hide the tracks of all parties involved. The more parties are involved the better the scrambling and mixing works. However, these type of transactions are more difficult and expensive than regular bitcoin transactions.
Woosley and Moon use this principle and apply it to Bluetooth. The idea is that every transaction snowballs through the network. Along the way it gets obscured by mixing the transaction with other transactions. Their tech only requires a sender and a receiver to mix transactions.
The developers tested their SDK with BlueWallet, a popular Bitcoin wallet for iOS and Android. By making one small change they were able to add their service to BlueWallet. From the perspective of the user experience nothing needs to change.
Snowball not finished yet
Snowball isn't a finished product yet. Moon and Woosley want to add payment processing solutions like BTCPayServer, and in addition they want third parties to help out adding privacy to transactions in exchange for a fee. On top of that Snowball needs to support both bluetooth and local wifi, there needs to be a native mobile software development kit and all this combines needs to be formalized and standardized into a new Bitcoin Improvement Proposal (BIP). As a result it would make it easier to adopt the technology.
Adding privacy to Bitcoin serious business
Over the course of 2019 it became very clear that privacy is an important feature for cryptocurrencies. Bitcoin isn't very private in its current form, but there are some endeavors that add extra layers of privacy. Take Wasabi for example. This wallet allows users to mix their bitcoin transactions in an user-friendly way. The company recently received a $337.500 investment in exchange for a 4.5 percent stake. As a result Wasabi's value is 7.5 million dollars. Wasabi is estimated to have 1 million dollars of revenue in 2019 alone.
At the same time Bitcoin Core developers are looking at two Bitcoin Improvement Proposals. The two proposals that could increase the privacy and usability of Bitcoin are called Schnorr and Taproot. The Schnorr proposal will increase privacy and decrease costs for the use of the multisignature security protocol. Taproot allows more smart contract functionalities without creating more privacy issues.
Posted from my blog: https://www.nederob.nl/2019/12/26/snowball-allows-for-offline-private-bitcoin-transactions/