reply on: Understanding Silent Payments – Part I \ stacker news ~bitcoin

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52 sats \ 7 replies \ @OT 6 Sep \ on: Understanding Silent Payments – Part I bitcoin

Perfect use case for cold storage. But I don't think this is a good idea.

"Currently, to maintain privacy, a recipient must interact with a sender to give them a new fresh address for every transaction. This leads to a bad user experience or operational difficulties.

For example:

Withdrawing from an exchange: for every withdrawal you should to get a new unused receive address from the BitBoxApp, register the new address at the exchange and verify it's the correct address on the BitBox and on a second device"

Withdrawing from the exchange will still link the TX when it confirms which defeats the purpose.

22 sats \ 6 replies \ @ChrisS 6 Sep

The problem you are describing is the way bitcoin works before silent payments. The idea of silent payments is There is no on chain connection between multiple payments send to a silent address.

21 sats \ 3 replies \ @OT 6 Sep

There is because the exchange can see where their UTXO was sent by checking the TXID.

21 sats \ 2 replies \ @ChrisS 6 Sep

The exchange/sender does not need to look on chain to know where they sent the bitcoin. The know who you are already. If you use the same address every time then everybody else that looks at the chain knows the transactions are linked. This solves the problem have needing to have some out of band communication or set up a server like btcpayserver to generate new addresses. It does not conceal of the identity of the receiver from the sender any more or less than a current bitcoin transaction does.

21 sats \ 1 reply \ @OT 6 Sep

I understand that it automates the generation of a new address each time. I just think bitcoiners need to understand there is still a link from the exchange (and authorities). The name is a little misleading IMO as it implies that its a private TX.

Uneducated Bitcoiners will likely use it and then end up consolidating UTXO's which defeats the whole purpose.

For donations, for I think this is the way. Maybe also for sending from a conjoin into cold storage.

21 sats \ 0 replies \ @ChrisS 6 Sep

Good points. The name certainly could be misleading for uneducated users.

0 sats \ 1 reply \ @Bell_curve 6 Sep

why not use lightning or liquid to avoid on chain transparency?

21 sats \ 0 replies \ @ChrisS 6 Sep

Sure use lightning it’s great. But even if you use lightning and/or liquid you still have to interact on-chain at times. And on chain especially while fees are low and for larger transactions is much easier to use than lightning.