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Silent Payments are Excellent for Enhancing Bitcoin’s Privacy

by Sonal Shukla

There is a new way of assuring security for online crypto payments, especially deals involving NFT! It is called, Silent Payments. Now, this does not mean that transactions that have taken place until now, have been unsafe/insecure. It only means that privacy has been enhanced. 

Ruben Somsen and Silent Payments

For those, who do not know him, Ruben Somsen is the originator of the longest-running meeting regarding digital currencies in Korea. The Seoul Bitcoin Meetup has been visible, since 2014. Somsen is the educator, who provides knowledge regarding consensus protocols, cryptography, and Bitcoin. Therefore, if such a person advocates/promotes the cause of Silent Payments, then people are going to listen! 

Somsen’s Proposal

The proposal takes recourse to the BIP47 concept. 

This concept permits users to come up with reusable payment codes. In turn, others may modify them for creating unusual public addresses. Only the two parties involved in a monetary transaction, would have knowledge of these tweaked addresses. In other words, Bitcoin would reach the receiver in a highly private fashion. There would be no exposing of a xpub. There would be no repeated reusage of the same address for receiving crypto payments.

Thanks to BIP47, the tradeoff would have been visible in the form of enhanced data usage. After all, the reusable addresses come to the fore via the inclusion of OP_RETURN messages. Here, there is a requirement for more data than that required for an ordinary Bitcoin transaction. The introduction of silent payments would eliminate this trade off. Instead, there would be greater focus on the scanning requisites for wallet software. 

How Silent Payments Operate

A sender gets hold of the silent payment public address that has been provided by the receiver. The next thing of importance is the private key of UTXO (the input). This input is what diverse senders pass on to the receiver, for creating new public addresses. However, the receiver will be the owner of these addresses. Therefore, whenever a deal goes through between any sender and this receiver, the Bitcoins are to be forwarded to one of the new public addresses. 

Upon receipt of the coins, the receiver must go through the blockchain for inputs. An assessment of the data suffices to provide knowledge about the silent payments addresses that have received payments.

Benefits of Such Operations

The tradeoff is quite beneficial, for it will help networks in charge of the operations of full nodes, to lessen their long-term burden of data. The fact that the proposal rests on the BIP47 concept, is a bonus. However, the developers tackling the setting up of wallet software, will have to buy in. This way, it will be possible to ensure compatibility of the newly-designed products with the scheme of the silent payments design. 

Soon after, it would be possible to enhance the utility for users looking forward to extremely secret transactions. Furthermore, there would be reduced interactivity with the chain. 

Current Status of Silent Payments

Users have become aware that the cryptographic Silent Payments scheme assists recipients to make addresses public. It also permits senders to tweak/modify any address. This enables them to forward Bitcoins to addresses that are completely unrelated to one another. 

Whenever a recipient desires to discover the location of a payment, he/she goes in for a verification process. The process may relate to UTXO Set transactions, mempool, or block Set transactions.

For now, any user may go in for the Silent Payments mode of completing a deal, via Signet. 

At present, the team is keen to validate the schema. It is equally keen to find out if the performance is viable or not. 

Are there any downsides to this Silent Payments approach?

  • For a silent payments transaction to go through satisfactorily, it is important to have all P2TR transactions verified. 
  • Then again, it is essential to have the public key of the very first input, in hand. If possible, and the concerned implementation allows it, the user could retrieve the public key of all the inputs. 
  • Thereafter, it is necessary to apply the calculation. However, it is imperative to investigate the expenses of such actions, too. 

Unless all the above-mentioned issues are resolved, the team will not consider having a new address format in place. For investment and trading check Bitcoin smart.


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