CashFusion is a privacy-enhancing protocol implemented on the Bitcoin Cash (BCH) network. It aims to improve transaction privacy by making the trail of transactions untraceable.
At a high level, CashFusion works by creating a transaction with an arbitrary number of inputs and outputs from multiple participants. These transactions are coordinated over the Tor network, which provides additional privacy by hiding users' IP addresses.
The complexity of these transactions makes it extremely difficult, if not mathematically impossible, to determine which outputs are associated with which inputs, thereby obfuscating the transaction trail.
For instance, if Alice, Bob, and Charlie participate in a CashFusion transaction, the resulting transaction could have inputs from all three participants and outputs that cannot be definitively traced back to any of them.
Unlike other privacy-enhancing UTXO (Unspent Transaction Output) management techniques, CashFusion has the ability to either break apart or fuse coins together. This reduces the total number of UTXOs within a wallet, which can improve efficiency and reduce transaction costs.
If Alice has a single UTXO worth 10 BCH, she could use CashFusion to break it into smaller UTXOs, such as two UTXOs worth 5 BCH each. Conversely, if she has many small UTXOs, she could use CashFusion to fuse them into a larger UTXO.
CashFusion is expected to replace the earlier CashShuffle protocol as the primary method for enhancing transaction privacy on the Bitcoin Cash network. While both protocols improve privacy, CashFusion provides greater flexibility and efficiency due to its ability to handle transactions with an arbitrary number of inputs and outputs.
Official CashFusion Specification
* All terms and definitions may update as the Cryptionary improves.
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