[bitcoin-dev] Third version of Silent Payment implementation

[Ruben Somsen]

Hi,

Apologies, the link I sent in my previous post was incorrect and should
have been:
https://github.com/bitcoin/bitcoin/pull/24897#issuecomment-1218641521

Let me also use this opportunity to share another clarifying comment:

"There seems to be some confusion about the function of the identifier. Its
function is not to create more than one identity, but to be able to
distinguish why someone paid you. For example, when the same entity is
raising money on behalf of two different charities and wants to know for
which of the two charities the sender intended their donation.

To be absolutely clear, the payments that appear on-chain are still
absolutely unlinkable by a third party observer, nor are they able to tell
which identifier was used.

In cases where you don't want people to know that you're the same entity,
the identifier is insufficient – you'll need a completely separate Silent
Payment address which (roughly) doubles your scanning efforts, so it's much
more costly in terms of performance."

This comment can be found here:
https://github.com/bitcoin/bitcoin/pull/24897#issuecomment-1266193417

Cheers,
Ruben

On Fri, Sep 30, 2022 at 1:03 AM Ruben Somsen <rsomsen at gmail.com> wrote:

> Hi woltx,
>
> Excellent work.
>
> >Implements the new scheme suggested by Ruben Somsen that allows multiple
> silent addresses per wallet with minimal overhead
>
> To expand on this, the scheme basically allows the resulting address to be
> recognizably marked (only recognizable by the recipient of course), which
> enables you to distinguish between different payment purposes (e.g. some
> people donate to you for purpose A, others for purpose B). Here's my
> original comment describing it:
>
> "Naively, the issue is that two keys means twice the scanning, but an
> interesting alternative would be to simply use the same key (assuming
> you're OK with using the same identity) but add a public identifier f to it
> when tweaking. So instead of hash(i*X)*G + X you get hash(i*X)*G + X + f*G
> . This means every additional "address" only costs one additional ECC
> addition when scanning (relatively cheap compared to doing ECC
> multiplications).
>
> The main downside with this is that f becomes crucial for recovering from
> backup. If we set f as an index (0, 1, 2, 3...) then you'd only have to
> remember how many "addresses" you issued (and perhaps overshoot when
> unsure) to ensure recovery of funds, though of course you'd rather also
> remember which index is associated with what payment reason.
>
> Absolute worst case scenario you could even do something similar to the
> gap limit where you scan the full history (not just the UTXO set so you
> don't miss spent outputs) with a default max index of e.g. 100, and then if
> you find out most of them are in use, you scan the next 100, etc. Costly,
> but thorough, and only needed as a last resort."
>
> Original comment here:
>
> https://gist.github.com/RubenSomsen/c43b79517e7cb701ebf77eec6dbb46b8#xpub-sharing
>
> Also good to note that f needs to be communicated to the sender somehow,
> perhaps as part of the address format.
>
> Cheers,
> Ruben
>
> On Fri, Sep 30, 2022 at 12:35 AM woltx via bitcoin-dev <
> bitcoin-dev at lists.linuxfoundation.org> wrote:
>
>>
>> This new version addresses most (or all) requests made in PR:
>>
>> . Implements the new scheme suggested by Ruben Somsen that allows
>> multiple silent addresses per wallet with minimal overhead.
>> . Implements a new RPC to retrieve silent addresses, which allows users
>> to assign different labels to different addresses. That way, the user knows
>> which silent address the UTXO came from.
>>
>> Example:
>>
>> ./src/bitcoin-cli -signet -rpcwallet="receiver" getspaddress
>> tsp001pjgcwd9p6f2rcgf35dlgvj77h2afylg6lp5cdn0cztrk4k54w99kqxn48tq
>>
>> # This will return the same address as above (both have no label)
>> ./src/bitcoin-cli -signet -rpcwallet="receiver" getspaddress
>> tsp001pjgcwd9p6f2rcgf35dlgvj77h2afylg6lp5cdn0cztrk4k54w99kqxn48tq
>>
>> # New label, new address
>> ./src/bitcoin-cli -signet -rpcwallet="receiver" getspaddress 'donation'
>> tsp011pjgcwd9p6f2rcgf35dlgvj77h2afylg6lp5cdn0cztrk4k54w99kq80t7lt
>>
>> In this new scheme, the address has a new field called identifier, which
>> tells the receiver and sender how to set the address correctly.
>>
>> If the receiver, for whatever reason, doesn't know which identifiers have
>> been used, there is no problem. The wallet can scan all identifiers from 0
>> to 99. Currently, only 100 different identifiers per wallet are allowed.
>> This limit, however, can be increased at any time in the future.
>>
>> Unlike address formats so far, sp addresses are not script-related and
>> may eventually include any additional information needed, such as an
>> expiration timestamp (or block height). That way, users don't have to track
>> the address indefinitely.
>>
>> As usual I wrote a step by step tutorial:
>> https://gist.github.com/w0xlt/c81277ae8677b6c0d3dd073893210875
>>
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>
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