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What are the downsides of using an address multiple times in a coinjoin tx on the input side? Is address reuse associated with blockspace savings/wastage in any way?

Peter Todd agrees with a tweet by CEO of zkSNACKs and believes address reuse is okay on both sides (input and output) in a coinjoin tx, however it looks misleading.

What is the best way to do coinjoin if a user has received multiple donations using a bitcoin address?

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The original Twitter discussion was about disallowing same-address inputs in a coinjoin.

Quoting Max Hillebrand's tweet:

There is no privacy downside of allowing it, there are only usability downsides and blockspace waste.

Address reuse does not cause less or more blockspace to be used. What Max probably meant is that under this rule, any user wishing to coinjoin multiple outputs from the same address would need to consolidate them first, which is an unnecessary extra step that doesn't improve anyone's privacy in any way and requires an extra on-chain transaction.

Peter Todd's tweet:

Preventing address reuse in the inputs/outputs of the conjoin itself doesn't stop people from reusing inputs/outputs one step removed, making it pointless.

So, he isn't exactly saying that it's okay to reuse addresses on either side of the coinjoin, just that disallowing this practice would be pointless. There are legitimate reasons to reuse addresses on the input (e.g. if you receive multiple donations to a single address because you cannot easily generate new addresses), and while I don't see why anyone would need to reuse addresses on the output, if anyone wanted to do it, they would just do it one step after the coinjoin, again adding an extra on-chain transaction.

What is the best way to do coinjoin if a user has received multiple donations using a bitcoin address?

The damage has already been done. Sensible coinjoin software will hopefully know to treat the outputs on this address as a single output (from a privacy standpoint), and coinjoin them as if they were any other output.

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  • a) Is there a difference in anonymity set and privacy of other participants in the coinjoin for 1 and 2? 1: Alice uses 2 inputs with same address in a coinjoin tx with other 4 peers. 2: Alice uses 1 input in coinjoin tx1 and another input for same address in coinjoin tx2 with 4 other peers in both. b) Why would someone reuse address in output side?
    – user133407
    Oct 28, 2022 at 5:24
  • a) Pretty sure there's no difference. b) I've already answered this with "I don't see why anyone would need to reuse addresses on the output". Oct 28, 2022 at 5:28

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