PayJoin and Wallet Supports.

[Obim34]

What does PayJoin do? A technique applicable in specific types of wallets, which enhances privacy by making transactions complicated and somehow difficult to identify who pay who, difficulty in identifying which input is from the sender, since inputs will be taken from both sides.

Just like a transaction, but a stranger cannot detect where the coin is coming from, since both collectively add inputs, it is very much possible to still track where the inputs are from, but at a glance, it is barely detectable.

Benefits of PayJoin - Privacy is the actual benefit of using PayJoin, PayJoin focuses on privacy. Good to know the difference between privacy and anonymity, PayJoin doesn't make transaction anonymous.

Sender input + Receiver input = Output (transaction)

Difference between PayJoin and CoinJoin - CoinJoin has to do with different users mixing their transactions among other transactions from different people, just like we have mixers, mixers practice CoinJoin techniques, except for the fact that CoinJoin is done using non custodial wallets, while mixers are centralized using their own site to do the mixing.

CoinJoin combine multiple transactions from different people, while PayJoin is only between a sender and receiver.

Wallets supporting PayJoin

1. CakeWallet
2. Bull Wallet
3. Sparrow Wallet
4. Wasabi Wallet
5. BTCPay Server
6. BitMask

How to use PayJoin in CakeWallet

1. Open wallet.
2. Go to privacy, toggle on Use PayJoin - done by the receiver
3. Then copy the QR scan code from Receive - done by the receiver
4. The sender scans the code the usual way, automatically identifying support for PayJoin.
5. The sender sets the input and creates a transaction, the transaction is then shifted to the receiver to include their own input and any adjustments before being returned back to the sender to finalize the transaction before broadcasting.

[Charles-Tim]

In short, the best for privacy is Coinjoin.

Difference between PayJoin and CoinJoin - CoinJoin has to do with different users mixing their transactions among other transactions from different people, just like we have mixers, mixers practice CoinJoin techniques, except for the fact that CoinJoin is done using non custodial wallets, while mixers are centralized using their own site to do the mixing.

CoinJoin combine multiple transactions from different people, while PayJoin is only between a sender and receiver.

Centralized mixers (what you mean as mixer) is different from coinjoin. Centralized mixers have different ways of mixing and it may require sending to many addresses or not, but what that is important is that the coin you sent is different from the coin you received.

[Joy_learns_crypto]

This is good, I sincerely appreciate the information but I have a question, you said on the payjoin the transaction is still trackable, can you explain how that is, what I mean is that can anyone interested in transaction track it without involving any stronger security body.
Also in your difference between Coinjoin and payjoin you only talked about coinjoin, but you did not do much extensive difference between the two.

[Gost ms]

CoinJoin plays a big role in keeping our transactions private. However, it has its advantages as well as disadvantages, such as it takes a lot of time to make a transaction. Many people create a transaction together and then share the outputs. As a result, it takes some time to create these transactions and after that, the time it takes for the transaction to be made in the blockchain.



I found this image through Google

[Cookdata]

This is good, I sincerely appreciate the information but I have a question, you said on the payjoin the transaction is still trackable, can you explain how that is, what I mean is that can anyone interested in transaction track it without involving any stronger security body.
Also in your difference between Coinjoin and payjoin you only talked about coinjoin, but you did not do much extensive difference between the two.

When someone send a transaction, you can view it on the blockchain that an input is spent to give another outputs and probably a change, this can be linked together but with Payjoin, it gives false impression of transactions to chain surveillance about input an output because the receiver send his input with input from sender to create different outputs, the inputs are spent together to give another outputs, this makes it hard to guess which inputs is spend to give the outputs, this is how it improves transaction privacy.

Coinjoin is different, multiple inputs are combined to give multiple outputs but these outputs are the same, which makes it hard to link the outputs to the inputs, the bigger the pool and more people that coinjoin, the better the privacy of that transaction.

Regardless of which one you use, don't link your transaction with previously used address or spend the payjoin/coinjoin with another inputs, they should be spent independently to keep your privacy.

[igebotz]

When someone send a transaction, you can view it on the blockchain that an input is spent to give another outputs and probably a change, this can be linked together but with Payjoin, it gives false impression of transactions to chain surveillance about input an output because the receiver send his input with input from sender to create different outputs, the inputs are spent together to give another outputs, this makes it hard to guess which inputs is spend to give the outputs, this is how it improves transaction privacy.

Coinjoin is different, multiple inputs are combined to give multiple outputs but these outputs are the same, which makes it hard to link the outputs to the inputs, the bigger the pool and more people that coinjoin, the better the privacy of that transaction.

Regardless of which one you use, don't link your transaction with previously used address or spend the payjoin/coinjoin with another inputs, they should be spent independently to keep your privacy.

Although Payjoin has been around for some years now and it's only getting abit of exposure now due to the recent integration to some of the popular wallets I'm still a little bit confused about the whole process because it says the receiver wallet also must participate in the transaction to create that "false impressions"

My question is: how will an empty wallet( receiver) participate? Or is there something I'm missing here?

[Cookdata]

When someone send a transaction, you can view it on the blockchain that an input is spent to give another outputs and probably a change, this can be linked together but with Payjoin, it gives false impression of transactions to chain surveillance about input an output because the receiver send his input with input from sender to create different outputs, the inputs are spent together to give another outputs, this makes it hard to guess which inputs is spend to give the outputs, this is how it improves transaction privacy.

Coinjoin is different, multiple inputs are combined to give multiple outputs but these outputs are the same, which makes it hard to link the outputs to the inputs, the bigger the pool and more people that coinjoin, the better the privacy of that transaction.

Regardless of which one you use, don't link your transaction with previously used address or spend the payjoin/coinjoin with another inputs, they should be spent independently to keep your privacy.

Although Payjoin has been around for some years now and it's only getting abit of exposure now due to the recent integration to some of the popular wallets I'm still a little bit confused about the whole process because it says the receiver wallet also must participate in the transaction to create that "false impressions"

There are two versions of payjoin, the first one requires a server for payjoin to work and both parties must be online, this makes it inconvenience but the version two doesn't require server and the reciever can join when they are ready, this is why we have some wallets now that support payjoin implementations now than then.

The "false impression" in this context means it's hard to tell which input is spent to give an output, what you did in the transaction is different and what outside observers see is different.

My question is: how will an empty wallet( receiver) participate? Or is there something I'm missing here?

Payjoin needs the input of the receiver to improve the privacy of the transaction, without their inputs, payjoin is useless as there wouldn't be any privacy in their transaction, it will look like normal transaction where you can tell which inputs was was spent to give another outputs.

[igebotz]

Payjoin needs the input of the receiver to improve the privacy of the transaction, without their inputs, payjoin is useless as there wouldn't be any privacy in their transaction, it will look like normal transaction where you can tell which inputs was was spent to give another outputs.

In a nutshell, Payjoin is useless unless the receiver has enough coins and gas fees to participate; I honestly expected it to be a significant improvement over coinjoin, which requires multiple inputs to break linkage.

That's the part I thought I was getting it wrong but it seems I wasn't off the cliff. They should wrap it up..

[Obim34]

My question is: how will an empty wallet( receiver) participate? Or is there something I'm missing here?

The receiver doesn't have an empty wallet.

Let me give an illustration of how it works, after the receiver creates the QR code and forward it to the sender, who in turn creates the transaction, and return the transaction back to the receiver to include own input before giving back the sender for broadcasting.

Lets say the sender wants to pay 0.5 BTC, he will send the 0.5 BTC, in which under PayJoin, the receiver adds her own input and send back to the sender for broadcasting. The 0.2 BTC is returned back as change to the receiver, it is not spent from the wallet.

Sender 0.5 -> Receiver

Receiver 0.2-> Receiver as change + 0.5 (0.5 from sender)

Receiver balance = 0.5 (balance received) + 0.2 (received as change)


0.5 + 0.2 both inputs are mixed in the same transaction, hence the 0.2 is returned as change as soon the transaction confirms, the transaction only consume fees from the receiver. Fees are cheap, I doubt it should be the problem.

[igebotz]

Let me give an illustration of how it works, after the receiver creates the QR code and forward it to the sender, who in turn creates the transaction, and return the transaction back to the receiver to include own input before giving back the sender for broadcasting.

Lets say the sender wants to pay 0.5 BTC, he will send the 0.5 BTC, in which under PayJoin, the receiver adds her own input and send back to the sender for broadcasting. The 0.2 BTC is returned back as change to the receiver, it is not spent from the wallet.

If you're transacting on one of the supported Payjoin wallets, Payjoin is set by default, once you copy a receiving address and paste it into another Payjoin supported wallets it will understands it  and set-up a Payjoin transaction automatically, you don't need to create a QR code.

The explanation you gave still confirms my "conclusion" that the receiver must contribute to make it work. It doesn't work if the receiver wallet is empty.

[Obim34]

If you're transacting on one of the supported Payjoin wallets, Payjoin is set by default, once you copy a receiving address and paste it into another Payjoin supported wallets it will understands it  and set-up a Payjoin transaction automatically, you don't need to create a QR code.

Yes, the receiver toggle on PayJoin in privacy settings, while the sender wallet, automatically detects, either copied address or QR code.

The explanation you gave still confirms my "conclusion" that the receiver must contribute to make it work. It doesn't work if the receiver wallet is empty.

Correct.

[Wiwo]

Payjoin needs the input of the receiver to improve the privacy of the transaction, without their inputs, payjoin is useless as there wouldn't be any privacy in their transaction, it will look like normal transaction where you can tell which inputs was was spent to give another outputs.

In a nutshell, Payjoin is useless unless the receiver has enough coins and gas fees to participate; I honestly expected it to be a significant improvement over coinjoin, which requires multiple inputs to break linkage.

That's the part I thought I was getting it wrong but it seems I wasn't off the cliff. They should wrap it up..

Coinjoin still remains the best privacy, between giving false privacy impression, doesn't mean payjoin, have any additional privacy layout for the sender, reality is when you want to get any privacy services you have to burn up some fees in Sat's.

But then I find the thread informative, since it outlined some level of technical transactions privacy services.

[Cookdata]

Lets say the sender wants to pay 0.5 BTC, he will send the 0.5 BTC, in which under PayJoin, the receiver adds her own input and send back to the sender for broadcasting. The 0.2 BTC is returned back as change to the receiver, it is not spent from the wallet.

Sender 0.5 -> Receiver

Receiver 0.2-> Receiver as change + 0.5 (0.5 from sender)

Receiver balance = 0.5 (balance received) + 0.2 (received as change)

Sorry but this illustration is wrong. Let's make some scenario using your example;

First example: If sender send exact 0.5 BTC as input + 0.2 BTC inputs of receiver

Code:

+----------------------------------+
| Sender 0.5BTC ->  Receiver 0.7BTC |
| Receiver 0.2BTC    
+----------------------------------+

The receiver get 0.7 BTC, the 0.2 BTC that was spent as input is included in the balance, there is nothing as separate change.


Let's say the sender has more than what he want to spend as input, 1 BTC for example but want to send 0.5 BTC with receiver 0.2 input

Code:

+----------------------------------+
| Sender 1BTC ->  Receiver 0.7BTC |
| Receiver 0.2BTC -> change0.5 BTC 
+----------------------------------+

You will get change here as 0.5 BTC but the change will be going to the sender and not the receiver.

The receiver output isn't separated, it comes a single output. If the inputs is separated like you illustrated, people will still be able to visualize the differentiate in the inputs and the outputs and hence privacy remain zero.