These schemes are used to provide anonymity to bitcoin transactions. In this model, a mixing service provider (an intermediary or a shared wallet) is used. Users send coins to this shared wallet as a deposit, and then, the shared wallet can send some other coins (of the same value deposited by some other users) to the destination. Users can also receive coins that were sent by others via this intermediary. This way the link between outputs and inputs is no longer there and transaction graph analysis will not be able to reveal the actual relationship between senders and receivers.
CoinJoin transaction with three users joining ...
