Bitcoin Privacy Solution Payjoin Gets $100K Grant From Maelstrom to Fuel Adoption

In a move towards evolving the Bitcoin privacy technology, investment firm Maelstrom has granted $100,000 to Bitcoin developer Ben Allen to advance Payjoin — a privacy feature of a transaction protocol that enhances scalability and privacy of the Bitcoin network.

The grant, made on May 20, will fund Allen's ongoing work on the Payjoin Devkit, in collaboration with fellow coder Dan Gould. The tool allows both the sender and receiver in a Bitcoin transaction to contribute inputs, breaking assumptions of traditional chain analysis and enhancing transaction efficiency.

Payjoin and Its Impact on Bitcoin

According to Nicolas Dorier, Payjoin is included in Bitcoin Improvement Proposal (BIP) 78 and it aims to hide the difference line between the sender and receiver inputs. It has a positive effect on the scalability of Bitcoin, as it helps group more transactions into one bundle.

"Privacy is improved and improved consolidation of transaction outputs is done, to the scalability's advantage," wrote Maelstrom in its announcement.

Grant Details: Unrestricted Monthly BTC Payments

Maelstrom's spokesperson confirmed that Allen will get a monthly Bitcoin stipend of $100,000 for twelve months. Of note, the grant has no set goals or deliverables, reflecting Maelstrom's approach of allowing things to happen:

"We believe grantees would perform better when they are given autonomy… rather than being highly controlled," explained the spokesman.

Bringing Payjoin into the Mainstream: Adoption in the Wallet Forefront

Allen will leverage the funding to scale up Payjoin implementations and boost mainstream Bitcoin wallet adoption. His vision is to remove the complexity from end users by refining the backend development: "I'm working on benchmarks so downstream developers can support Payjoin in wallet software," said Allen. "The biggest thing we can do is make the experience easier and move complexities away from the user."

While the concept is good, the system still has issues — notably that of needing the receiver to be online and the inherently interactive nature of Payjoin compared to regular Bitcoin transactions.

Arthur Hayes: Privacy Gains Even for Non-Users

Arthur Hayes, who is BitMEX co-founder and current Chief Investment Officer at Maelstrom, was impressed by the broader implications of Payjoin:

"Even partial adoption subverts critical assumptions made by financial monitoring firms," he said. "What's so great about Payjoin is that even non-users gain from its use."

As Hayes explains, existing blockchain analysis companies typically make the assumption that several inputs in a transaction are owned by a single entity — a policy that Payjoin explicitly defies.

The Road Ahead: BitcoinCore Integration as a Success Marker

A representative from Maelstrom clarified that adoption by mainstream open-source Bitcoin wallets, especially BitcoinCore, would be an unmistakable indication of Payjoin's success.

"If the BitcoinCore wallet ever adopts it, that would be a huge signal," they said.

Maelstrom further reaffirmed that it would continue to be interested in funding privacy-focused Bitcoin development, actively seeking out contributors with established credentials in the field.

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