1. Initialization: The receiver generates a unique Silent Payment (SP) address, which is shared with the sender. This SP address is derived using a combination of the receiver's public key and a tweak value.
2. Transaction creation: When the sender wants to make a payment to the receiver, they use their secret key(s) together with the public key of the SP address to derive a shared secret. This shared secret is used to generate a new destination address for the payment.
3. Scanning: The receiver's wallet connects to a specialized server that provides "tweak" data, allowing the wallet to scan transactions and identify payments intended for them without requiring notification transactions.
4. Payment processing: The sender broadcasts the transaction to the Bitcoin network, and the receiver's wallet verifies the payment by checking the transaction against the tweak data provided by the server.

import { BitcoinJS } from 'bitcoinjs-lib';
import { bech32 } from 'bech32';

const receiverPubKey = '...'; // receiver's public key
const tweakValue = '...'; // tweak value

const spAddress = bech32.encode('bc1', receiverPubKey, tweakValue);
console.log(spAddress); // unique Silent Payment address

// Later, when the sender wants to make a payment
const senderPrivKey = '...'; // sender's private key

const sharedSecret = deriveSharedSecret(senderPrivKey, receiverPubKey, tweakValue);
const destAddress = generateDestAddress(sharedSecret);
console.log(destAddress); // new destination address for the payment

// Broadcast the transaction to the Bitcoin network

• The recipient shares a single static "silent payment address" publicly
• Senders can derive new one-time addresses from this static address to send payments
• Recipients can scan the blockchain to detect payments sent to addresses derived from their silent payment address

• Improved Privacy: New addresses are used for each transaction without requiring manual address generation[1]
• Enhanced Usability: Recipients only need to share one static address instead of constantly generating new ones[1]
• No On-Chain Overhead: Unlike some other solutions, Silent Payments don't require additional on-chain transactions for setup[1]

• Increased Scanning: Recipients need to scan more transactions to detect payments, increasing computational requirements[1]
• Recovery Complexity: Wallet recovery may take longer due to the need to scan more of the blockchain[1]