Improving Bitcoin Privacy With Silent Payments

The listed below is a direct excerpt of Martys Bent Issue # 1214: “Silent payments.” Register for the newsletter here.The initially silent payment transaction on Signet, a bitcoin testnetvia Ruben SomsenHeres an interesting proposal from Ruben Somsen that would assist increase the personal privacy of those receiving bitcoin: Silent Payments. Somsens proposition builds on principles like BIP47, which permits people to create reusable payment codes that can be tweaked by others to develop special public addresses that only the sender and receiver understand. This enables the receiver to accept bitcoin in a more personal fashion when compared to exposing a xpub or just recycling a single address to get payments.BIP47 introduces the tradeoff of increased information use as the reusable addresses it enables are produced by including OP_RETURN messages, which need more information than your average bitcoin deal. With quiet payments, the tradeoff made by BIP47 in the form of extra data related to the development of a payment code utilizing OP_RETURN is eliminated and replaced with an increase in the scanning requirements of wallet software. The method I understand it, senders take a quiet payment public address provided by a receiver, use the personal secret of the input (UTXO) they will be utilizing to send out bitcoin to the receiver to create a brand-new public address owned by the receiver and send the bitcoin to that address. The receiver then scans the blockchain for inputs and utilizes information related to their silent payments deal with to identify where payments have actually been received.This is an intriguing tradeoff because it would minimize the long term information concern on those running full nodes if it is adopted in favor of solutions like those made it possible for by BIP47, but needs buy-in from those constructing wallet software application to guarantee that their products are compatible with the silent payments style scheme. A heavy lift, no doubt, however one that might be beneficial to try to get executed throughout these wallet software applications. This would supply increased utility for those looking to get bitcoin payments with better personal privacy assurances and less interactivity with the chain. Think dissidents living under overbearing regimes who require to get payments as privately and easily as possible.Earlier today, somebody started the first quiet payments deal on Signet, a bitcoin testnet. You can dig into that here. We will be keeping you freaks abreast of the advancements of quiet payments as they unfold.