Clear DefinitionsTumbleBit
1 min read
Pronunciation
[tuhm-bul-bit]
Analogy
Think of TumbleBit like a coin-shuffle machine that allows two parties to exchange coins without the mixer learning who swapped which coins.
Definition
Key Points Intro
TumbleBit provides trustless coin mixing using off-chain puzzle payments.
Key Points
Unlinkability: hides transaction links through puzzle-based payments
Puzzle escrow: locks funds in Bitcoin scripts until puzzles are solved
Off-chain mixing: reduces on-chain footprint and fees
Trustless: mixer cannot steal or deanonymize funds
Example
Alice and Bob use TumbleBit’s payment channel: Alice locks coins in a puzzle escrow, the Tumbler provides a puzzle for Bob, and upon solving Bob’s puzzle, Alice’s coins are released to Bob’s address, unlinkably.
Technical Deep Dive
TumbleBit protocol involves three phases: setup (both parties fund escrow scripts), puzzle generation (Tumbler creates cryptographic puzzles), and redemption (solving puzzles releases funds). Scripts use hash time-locked contracts (HTLCs) and RSA-based puzzles, ensuring the Tumbler cannot redeem without participants’ cooperation.
Security Warning
Coordination failures or incorrectly funded channels can cause permanent coin loss.
Caveat
Requires online availability and coordination among participants for puzzle exchange.
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