The beneath is a direct excerpt of Marty’s Bent Issue #1214: “Silent payments.” Sign up for the newsletter here.

through Ruben Somsen
Here’s an attention-grabbing proposal from Ruben Somsen that may assist enhance the privateness of these receiving bitcoin: Silent Payments. Somsen’s proposal builds on ideas like BIP47, which permits people to create reusable fee codes that may be tweaked by others to create distinctive public addresses that solely the sender and receiver are conscious of. This permits the receiver to settle for bitcoin in a extra non-public trend in comparison to exposing a xpub or just reusing a single handle to obtain funds.
BIP47 introduces the tradeoff of elevated information utilization because the reusable addresses it permits are produced by together with OP_RETURN messages, which require extra information than your common bitcoin transaction. With silent funds, the tradeoff made by BIP47 within the type of further information related to the creation of a fee code utilizing OP_RETURN is eradicated and changed with a rise within the scanning necessities of pockets software program. The manner I perceive it, senders take a silent fee public handle supplied by a receiver, use the non-public key of the enter (UTXO) they can be utilizing to ship bitcoin to the receiver to create a brand new public handle owned by the receiver and ship the bitcoin to that handle. The receiver then scans the blockchain for inputs and makes use of information related to their silent funds handle to establish the place funds have been obtained.
This is an attention-grabbing tradeoff as a result of it might cut back the long run information burden on these working full nodes if it is adopted in favor of options like these enabled by BIP47, however requires buy-in from these constructing pockets software program to be sure that their merchandise are suitable with the silent funds design scheme. A heavy carry, little question, however one which may be worthwhile to strive to get carried out throughout these pockets softwares. This would supply elevated utility for these trying to obtain bitcoin funds with higher privateness assurances and fewer interactivity with the chain. Think dissidents residing underneath oppressive regimes who want to obtain funds as privately and simply as doable.
Earlier at this time, somebody initiated the primary silent funds transaction on Signet, a bitcoin testnet. You can dig into that here. We can be protecting you freaks abreast of the developments of silent funds as they unfold.