Disclaimer: Please be aware that some of the information in this blog may be out of date since we migrated to Energi Gen 3 on March 9th 2020. For the latest information, please refer to our more recent articles.

Users who use the Energi Core Wallet may have noticed a section with the buttons, “PrivateSend” and “Start Mixing” but had no idea what they do and are used for:

In this article, we will break down the basics of PrivateSend, what it is used for and why users who are staking Energi (NRG) should NOT use this feature.

PrivateSend Basics

PrivateSend gives you true financial privacy by obscuring the origins of your funds. All the Energi in your wallet is comprised of different “inputs” which you can think of as separate, discrete coins. PrivateSend uses an innovative process to mix your inputs with the inputs of two other people, without having your coins ever leave your wallet. You retain control of your Energi at all times. The purpose behind PrivateSend is to maintain the privacy of your Energi coins by removing its history from the Energi network.

PrivateSend Process

The PrivateSend process can be broken down into these 5 steps:

PrivateSend begins by breaking your transaction inputs down into standard denominations. These denominations are 0.01 NRG, 0.1 NRG, 1 NRG, and 10 NRG — sort of like how fiat money is used every day. Your wallet then sends requests to specially configured software nodes on the network, called “Masternodes.” These Masternodes are informed then that you are interested in mixing (Mixing involves exchanging a string of transactions with a Masternode so it can construct a mixing transaction with inputs from the clients in its mixing pool) a certain denomination. No identifiable information is sent to the Masternodes, so they never know “who” you are. When two other people send similar messages, indicating that they wish to mix the same denomination, a mixing session begins. The Masternode mixes up the inputs and instructs all three users’ wallets to pay the now-transformed input back to themselves. Your wallet pays that denomination directly to itself, but in a different address (called a change address). In order to fully obscure your funds, your wallet must repeat this process a number of times with each denomination. Each time the process is completed, it’s called a “round.” Each round of PrivateSend makes it exponentially more difficult to determine where your funds originated from. This mixing process happens in the background without any intervention on your part. When you wish to make a transaction, your funds will already be anonymized. No additional waiting is required.

One key component when using PrivateSend is your Energi Core Wallet only contains 1000 of these “change addresses.” Every time a mixing event happens, up to 9 of your addresses are used up. This means those 1000 addresses last for about 100 mixing events. When 900 of them are used, your wallet must create more addresses. It can only do this, however, if you have automatic backups enabled. Consequently, users who have backups disabled will also have PrivateSend disabled.

PrivateSend Issues

One thing to be clear of is that PrivateSend IS NOT related to Staking. PrivateSend and Staking are two completely different features and should not be used together. Some issues with using PrivateSend are: