Three ways to Whirlpool

All Bitcoin transactions are public, anyone can look at them. Whirlpool breaks deterministic links to past transactions and provides forward-looking anonymity. This guide will explain three easy ways to Whirlpool your bitcoin so that you can preserve the censorship-resistant and permissionless attributes of Bitcoin.

Background:

There is nothing special required to view every Bitcoin transaction that has ever occured, they are all publicly available on the blockchain. You don't need a node, just a simple block explorer website will do; such as Mempool.space, KYCP.org, or Blockstream Explorer. Assume that your advesaries are watching.

What isn't stored on the blockchain is your personally identifying details such as name, address, phone number, etc. That information is cataloged externally by third parties such as your employer, your brokerage/exchange, or possibly a fundraiser you donated to and volunteered that information to. If your employer paid you in Bitcoin then they would be able to follow your public transactions and see that you made a donation to a fundraiser, for example. Likewise, the organizer of the fundraiser would be able to see the history of your Bitcoin transactions and they would know how much bitcoin you had going into the transaction where you sliced off a small portion to donate.

Further more, any external observer who knew what the Bitcoin donation address was, would be able to monitor all incomining donations and then see where the remaining change from those donations was sent to. These external observers could also see where the donations went after the initial deposit. If there was any personally identifying information held by a trusted third party where fiat was traded for bitcoin or where bitcoin was traded for fiat, then the custodian of that information will be compelled to turn over those details that personally identify an individual.

"The existing [legacy financial] system has several legislative mechanisms built in that ensure basic privacy (your bank doesn't share your account balance and transaction history with the barista at the coffee shop for example). The blockchain doesn't have the luxury of legislative power to solve these problems, therefore software solutions such as CoinJoin are used to obtain these basic protections."

-Samourai Wallet in a March 15, 2022 blog post.