The Human Rights Foundation (HRF) was already promoting Bitcoin’s privacy features. Now, it will also fund the development of them.

HRF, the New York-based nonprofit that promotes and protects human rights globally, has launched a fund to support Bitcoin developers who make the Bitcoin network more private, decentralized and resilient. The first grant, worth close to $50,000, has been gifted to London-based Bitcoin developer Chris Belcher to realize an implementation of his CoinSwap protocol. A second grant of the same size will be announced soon.

“At the moment, the Bitcoin network is improving but is far from as usable and private as it needs to be with authoritarianism and surveillance on the rise in many countries,” said Alex Gladstein, chief strategy officer at the Human Rights Foundation. “With more support, developers like Chris can make it possible for activists to receive donations and continue their important work under increased pressure.”

A Grant to Make Bitcoin More Private

The Human Rights Foundation was founded in 2005 by Venezuelan film producer and human rights advocate Thor Halvorssen Mendoza, and is currently chaired by Russian chess grandmaster Garry Kasparov. It has been a strong advocate for Bitcoin and its privacy features for some time, with Gladstein in particular frequently promoting the digital currency as a financial tool for human rights activists, civil society organizations and journalists living under oppressive regimes.

“Human rights defenders and reporters around the world face increasing financial repression in the form of frozen bank accounts, restrictions on foreign funding, payment surveillance and general difficulty in earning income or receiving donations,” Gladstein said. “Bitcoin can be a powerful tool for them to use moving forward alongside encrypted messaging apps like Signal and projects like Tor Browser and SecureDrop.”

The Human Rights Foundation was contacted last week by a private individual (who preferred not to have their name disclosed) who heard of the Human Rights Foundation and Gladstein’s work on Bitcoin, and wished to donate $100,000 to Bitcoin development. The money was gifted with no strings attached, trusting that the foundation would find a good home for it. The HRF in turn wanted to award two Bitcoin projects in line with the organization’s own goals.

To pick the recipients, the Human Rights Foundation conducted an informal poll among Bitcoin privacy experts to find two projects that are furthering Bitcoin’s privacy, decentralization and resilience. Belcher and his recent CoinSwap proposal came up as a unanimous suggestion, Gladstein said.

“CoinSwap stands out because, if a robust mobile wallet could be developed with native integration, it would give transacting parties a much higher degree of privacy and protection from chain analysis,” he explained.

How CoinSwap Can Improve Bitcoin Privacy

CoinSwap is a privacy technique first proposed in 2013 by former Bitcoin Core developer and Blockstream cofounder Gregory Maxwell. Leveraging Atomic Swaps, the trick that also enables the Lightning Network, users can essentially exchange coins without revealing any link between the exchanged coins, and without the swap being identifiable as such on the Bitcoin blockchain.

If done right, that is.

Belcher, one of the world’s foremost experts in Bitcoin privacy, recently published a detailed outline of how the CoinSwap technique could, in fact, be done right. The developer — who previously authored the Bitcoin privacy guide and helmed development of both JoinMarket and the Electrum Personal Server — addressed a range of potential privacy leaks, and envisioned a JoinMarket-type of liquidity market to mix coins. (Additional solutions include multi-transaction swaps to counter amount correlation, transaction routing to avoid single points of trust for privacy and fidelity bonds to make denial-of-service attacks costly.)

A working CoinSwap implementation would represent another big step forward for Bitcoin privacy. Although tools like CoinJoin are out there, and do offer privacy, these do often still reveal that the tools themselves were used. CoinSwap transactions, in contrast, could be made indistinguishable from regular transactions. This not only benefits CoinSwap users themselves, but everyone else too, as blockchain analysts could no longer safely assume that regular-looking transactions were in fact regular transactions — they might just as well have been CoinSwap transactions.

“The Human Rights Foundation teaches activists in authoritarian countries how to use cypherpunk technology like Signal, encryption and more… and a lot of these activists also have a use for Bitcoin because they keep getting banned from having bank accounts,” Belcher told Bitcoin Magazine. “Obviously if they used Bitcoin without privacy, their governments can spy on their transactions and cause them problems. Privacy tools like CoinSwap can help with that.”

Belcher plans to realize his CoinSwap protocol both as a standalone application and a software library that other wallets can use to add it as a feature. He will be developing it as a software project to which anyone can contribute, and hopes to have a minimal viable product ready in about six to nine months.