Silent payments

[GazetaBitcoin]

Fixed, you can check it now.

Yay, thank you for this and I am glad that you liked my template!

Will update the OP whenever I see a new translation added.

Okay, witcher_sense As a heads-up, you should "receive" at least 10 translations for your topic. Inside AOBT, we consider a topic as "done" once it receives 10 translations. Of course, if translators are willing, other may make even other more translations besides the 10 needed one, thus 10 is a minimum number of translations that your topic will have.

I hope this is good news for you.

Cheers

[Porfirii]

Hey witcher_sense,

First of all, congratulations for your work: it's contributions like this that make this forum so great. Also, thanks to paid2 for raising awareness about this topic and proposing it for translation.

Please, find the subsequent translation into Spanish here.

[witcher_sense]

Hey witcher_sense,

First of all, congratulations for your work: it's contributions like this that make this forum so great. Also, thanks to paid2 for raising awareness about this topic and proposing it for translation.

Please, find the subsequent translation into Spanish here.

Thank you for your kind words, added your work to the OP.

[GazetaBitcoin]

Hey again, witcher_sense, I am presenting you two more translations:

• Urkainian translation
• Russian translation

Both have been made by DrBeer, which is among most active AOBT translators
Can you add these ones to OP too, please?

[witcher_sense]

Hey again, witcher_sense, I am presenting you two more translations:

• Urkainian translation
• Russian translation

Both have been made by DrBeer, which is among most active AOBT translators
Can you add these ones to OP too, please?

Can barely keep up with you guys, good work! 

[GazetaBitcoin]

Can barely keep up with you guys, good work!  

Hehe, no worries, we are all more than glad to be able to help and make interesting & useful essays more visible for the entire forum...

And I am also coming with more good news, as a Pidgin translation was made today, by Hatchy. Here it is: Payments wey dey Silent . And now we already have 5 translations for your topic, so at least 5 more will follow...

Cheers!

[joker_josue]

@witcher_sense thanks for sharing this idea. It looks very interesting.

Do you think this solution could be especially useful in the commercial environment?
A way to hide who makes purchases at a specific merchant?

[BlackHatCoiner]

A way to hide who makes purchases at a specific merchant?

Remember: silent payment hides the receiver. It's the merchant who gains the privacy.

It's useful because it eliminates the burden of interactivity. Previously, the merchant needed a web server that continuously generated a whole new address for every visitor. Now, it's static, non-interactive; the burden has moved into the wallet software. The merchant still needs to be careful and not consolidate everything into one transaction, as it would harm their privacy.

[joker_josue]

A way to hide who makes purchases at a specific merchant?

Remember: silent payment hides the receiver. It's the merchant who gains the privacy.

It's useful because it eliminates the burden of interactivity. Previously, the merchant needed a web server that continuously generated a whole new address for every visitor. Now, it's static, non-interactive; the burden has moved into the wallet software. The merchant still needs to be careful and not consolidate everything into one transaction, as it would harm their privacy.

Hiding the merchant ends up protecting both sides. Nobody knows where I spent that money.

My question now is: if the trader consolidates all these UTXO, will it be possible to identify who sent the money?

[LoyceV]

My question now is: if the trader consolidates all these UTXO, will it be possible to identify who sent the money?

Without knowing anything else: no. Let's say 10 people each send a silent payment to a controversial seller. If the seller consolidates those 10 inputs, each of those 10 people now knows the other 9 transactions that were received by the seller. If someone wanted to spy on who pays this seller, he could place an order and be one of those 10 people. But all he'll know is the 10 transactions. Without further information, he still doesn't know who the addresses belong to.

[joker_josue]

My question now is: if the trader consolidates all these UTXO, will it be possible to identify who sent the money?

Without knowing anything else: no. Let's say 10 people each send a silent payment to a controversial seller. If the seller consolidates those 10 inputs, each of those 10 people now knows the other 9 transactions that were received by the seller. If someone wanted to spy on who pays this seller, he could place an order and be one of those 10 people. But all he'll know is the 10 transactions. Without further information, he still doesn't know who the addresses belong to.

Well, that was always going to be some layer of privacy.

The problem always lies with the recipient, how they will then deal with these UTXO.

This leads me to another question: what way is there to consult consolidate  these UTXO, without making this type of exposure?

[LoyceV]

The problem always lies with the recipient, how they will then deal with these UTXO.

"Privacy" is not just one thing, it's all things combined. Think of it as a puzzle, and each piece you add makes it more private. So if you're making a donation to a controversial cause through silent payments, don't send it from an address that can be linked back to you.

This leads me to another question: what way is there to consult these UTXO, without making this type of exposure?

What do you mean by "consult"? On-chain, they're just normal Bitcoin transactions.

[joker_josue]

This leads me to another question: what way is there to consult these UTXO, without making this type of exposure?

What do you mean by "consult"? On-chain, they're just normal Bitcoin transactions.

I expressed myself badly. You meant "consolidate".

Now, logically, all parties should seek to maintain the level of privacy they deem appropriate for themselves.

[LoyceV]

This leads me to another question: what way is there to consult consolidate these UTXO, without making this type of exposure?

I can't think of anything. This may be silent payment's Achilles heel.

[vjudeu]

This may be silent payment's Achilles heel.

It is. Because if you use Silent Payments, but your recipient does not, then you will be exposed. In general, the solution is to use Silent Payments on both ends: as the sender, and as the recipient. Then, it works fine. In other cases, you have transactions with terrible privacy score, like this one: https://mempool.space/testnet/tx/b2954e36429c23c83292fc7146e140da7b8cec938aec97a5831e878d197d5aa1

See? Some miner tried to generate new coins on some Silent Payment address, or some other deterministically-derived keys. And all of that privacy is destroyed, if you consolidate all of those coins in a single transaction.

[LoyceV]

In general, the solution is to use Silent Payments on both ends: as the sender, and as the recipient. Then, it works fine.

I don't see how that helps: if you send me a silent payment, and I send a silent payment to someone else, my inputs can still be more than one different inputs. If I send a normal payment, it's the same.

[vjudeu]

It is not the same, because of deniability: https://www.truthcoin.info/blog/deniability/

If you have someone's address, which is reused, then it is crystal clear, that you are sending coins to someone else. However, if you have new addresses every time, then it is not that obvious, if something is a payment, or is it just related to consolidating your own coins, and sending a payment to yourself.

Also, if everything is splitted into more than one transaction, then it is even harder to know, what really happened. Because using Silent Payments also means, that instead of receiving 1 BTC in a single output, you may receive two 0.5 BTC outputs, or ten 0.1 BTC outputs. And if it is done from different transactions, then it is completely unclear, what really happened.

Without Silent Payments, it is obvious, that if Alice received ten 0.1 BTC coins, on the same address, then all of them are owned by Alice. With Silent Payments, you have some different address each time. And we have only 8 decimal places, which means, that by using up to 8 outputs, you can express any amount, by using round numbers. In practice, I guess something like 3 or 5 outputs is sufficient, if not less (it depends, how many coins, and what amounts you have).

[NotATether]

Without Silent Payments, it is obvious, that if Alice received ten 0.1 BTC coins, on the same address, then all of them are owned by Alice. With Silent Payments, you have some different address each time. And we have only 8 decimal places, which means, that by using up to 8 outputs, you can express any amount, by using round numbers. In practice, I guess something like 3 or 5 outputs is sufficient, if not less (it depends, how many coins, and what amounts you have).

So that means, it's kind of like having a mixer but on the blockchain.

They have a few things in common:

- There is practically no trace of the payment on-chain, mixers because they are going through many coinjoin rounds, Silent Payments because they do not even broadcast the address directly on-chain.
- You can arrange the outputs to be split and sent at different times, in equal amounts
- Chain analysis probably hates them both

That being said, I expect silent payments to get massively adopted, fast.

[joker_josue]

That being said, I expect silent payments to get massively adopted, fast.

But, is it possible to make silent payments at this time?

Imagine that I want to send it to myself using this type of payment. Can I do this now?

[LoyceV]

Imagine that I want to send it to myself using this type of payment. Can I do this now?

That's only useful for testing. On-chain, it's just a normal transaction. Any data you're hiding is known to both sender (you) and receiver (you) already