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There is a sacred realm of privacy for every man and woman where he makes his choices and decisions — a realm of his own essen­tial rights and liber­ties into which the law, gener­ally speaking, must not intrude.

Geoffrey Fisher, Archbishop of Canter­bury (1959)

Jam is a tool, just like bitcoin. Before using it, you should understand how you could benefit from using it, how it works, and how to use it correctly. In order to answer the "how" you should also understand the "why" --- why was it created, and what is the problem in the first place?

To answer that properly, we will have to talk about privacy and financial privacy in general, and bitcoin privacy in particular:

  • Why care about privacy?
  • Why use Jam?

Why Care About Privacy?

"Privacy is neces­sary for an open society in the electronic age. Privacy is not secrecy. A private matter is something one doesn't want the whole world to know, but a secret matter is something one doesn't want anybody to know. Privacy is the power to selec­tively reveal oneself to the world."

Eric Hughes

With these powerful words Eric Hughes opened his Cypher­punk's Manifesto in 1993. The differ­ence between privacy and secrecy is subtle, but impor­tant. Choosing to remain private does not imply that one has secrets or has something to hide. To illus­trate this just realize that what you do on the toilet or in the bedroom is neither illegal nor a secret (in most cases), yet you close the door and pull the curtains.

Similarly, how much money you have and where you spend it is not neces­sarily a secret matter. It should, however, be a private one. Most would agree that your boss should not know how you choose to spend your salary.

The impor­tance of privacy is recog­nized by many inter­na­tional bodies. From the American Decla­ra­tion of the Rights and Duties of Man to the United Nations, it is recog­nized that privacy is a funda­mental human right worldwide.

No one shall be subjected to arbitrary inter­fer­ence with his privacy, family, home or corre­spon­dence, nor to attacks upon his honour and reputa­tion. Everyone has the right to the protec­tion of the law against such inter­fer­ence or attacks.

Article 12, United Nations Decla­ra­tion of Human Rights

Although Bitcoin was often described as an anony­mous method of payment by early propo­nents and by the media, it is anything but. Bitcoin is pseudo­ny­mous at best and as of today making sure that your pseudo­ny­mous bitcoin identi­ties cannot be linked to your real-world identity proves diffi­cult for most people. 

Bitcoin is an open system. Its public ledger can be inspected and studied by everyone. Thus every trans­ac­tion that is embedded in its proof-of-work chain will be exposed for as long as Bitcoin exists: eternity. Failing to follow privacy best practices now can poten­tially have negative reper­cus­sions in the future.

Privacy, like security, is a process and it is diffi­cult, but not impos­sible. Tools continue to be devel­oped to help preserve privacy while using Bitcoin and fortu­nately most of these tools become easier to use over time. Unfor­tu­nately no panacea exists. One has to remain aware of the trade­offs and follow best practices as they evolve.1

Free Software

Why Jam?

Jam is a front-end for JoinMarket, a privacy-focused bitcoin software that uses a peer-to-peer marketplace to facilitate collaborative transactions, also called "CoinJoins."2

A collaborative transaction, as the name implies, is a bitcoin transaction that is done collaboratively by multiple parties. The tricky part of getting a collaborative transactions done is not technical, but social. It is a problem of matchmaking, timing, and trust.

Usually, this problem is solved with a central coordinator.

JoinMarket takes a different approach. It allows participants to propose collaborative transactions to others, creating an open market of buyers and sellers, which removes the central coordinator from the equation.


Tech Fundamentals

With the motivation and purpose of Jam covered, understanding the fundamentals of bitcoin in general and bitcoin privacy in particular might be useful.

Privacy Fundamentals

  1. Some parts of the above are based on "Bitcoin Privacy: Best Practices, written by Gigi and released under CC BY-SA 4.0 license." 

  2. We prefer to refer to them as collaborative transactions, which is more concise and explanatory.