Glossary

Common Input Ownership Heuristic

1 min read

The Common Input Ownership Heuristic is one of the core heuristics used by chain analysis companies to determine the owner of specific UTXOs. This heuristic currently assumes that all inputs of a given transaction are owned by the same owner.

This heuristic has never offered certainty, and as Bitcoin continues to evolve, it is becoming less reliable. Technologies such as CoinJoin, CoinSwap, regular multisig, and, in the future, MuSig transactions all contradict this heuristic by accepting inputs from many different parties.

Related Terms
Chain Analysis
Chain analysis uses heuristics to analyse the blockchain and trace ownership of bitcoin across transactions. Chain analysis is performed by companies who contract with governments and regulated institutions to provide insight into how individuals send and receive bitcoin.
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CoinJoin
CoinJoin transactions provide increased privacy for users by breaking the heuristics used by chain analysis companies. A CoinJoin transaction combines inputs from several users and returns to each user the exact same amount, making it difficult to track users and their coins.
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Unspent Transaction Output (UTXO)
A UTXO is a discrete piece of bitcoin. Bitcoin does not use accounts and balances. Instead, individual pieces of bitcoin are owned by individuals, analogous to physical coins or cash.
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Multisig
Bitcoin can be sent to an address such that spending that bitcoin requires multiple signatures from different private keys. This setup allows joint custody of funds, and can be as simple or as complex as needed.
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MuSig
MuSig is a protocol for creating Taproot multisig public keys and signatures. MuSig makes use of Schnorr signature and public key aggregation
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Script Type Heuristic
The Script Type Heuristic is utilized in chain analysis in order to track ownership of bitcoin across transactions.
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