Silent payments in Bitcoin are made with the new BIP 352

The possible implementation of silent payments (silent payments) in Bitcoin took a step forward with the launch of the new BIP 352 (short for “Bitcoin Improvement Proposal”). The aim of the initiative is to improve data protection by eliminating direct interaction between the sender and recipient of a transaction.

The main focus of silent payments is to use a new address for each bitcoin transaction. This prevents address reuse and provides an additional layer of anonymity. It is crucial that only the participants know this addressand the recipient is the only one who can spend those bitcoins (BTC) once deposited.

A concrete analogy for this method would be depositing money into a vault that only the recipient can find and open. This box would be hidden in a bank vault, for example, and would not be visible to an outsider.

So far, the generation of new Bitcoin addresses requires direct interaction between the sender and recipient. There are various static address proposals to reduce this interaction, however have the problem of disclosing metadata in the bitcoin ledger or in the blockchainwhich affects the privacy of users, says the text with which silent payments are represented.

The BEEP 352, created by Josie Baker and Ruben Somsen, attempts to eliminate this need for interaction. Including an outpoint hash (generated hash value specific to a bitcoin transaction) in the calculations ensures that each address is unique and subsequent payments are not compromised. The developers emphasize the goal of achieving this without incurring additional costs in transactions.

To find the address that corresponds to your bitcoins, The recipient has to scan the blockchain until they find it. This is possible on full nodes, but more difficult on lightweight nodes that store only a tiny fraction of the data in each block. Therefore, such compatibility with lightweight nodes requires even more research, the authors of BIP 352 say.

More details on BIP 352 for silent payments in Bitcoin

One of the main advantages of Silent payments consist in avoiding an exit linki.e. the ability to link multiple transactions across the outputs on the blockchain.

Exit linkage can reveal sensitive information about users, such as their spending behavior, financial habits, and possibly even their identity. Furthermore, it affects not only who participates in a transaction, but also others whose address has been linked in other transactions.

BIP 352 is compatible with other issuance protocols such as CoinJoina data protection solution that consists of mixing inputs and outputs of many transactions to make them difficult to trace.

The proposal for silent payments in Bitcoin has long been polished. In CriptoNoticias, the project was reported in March 2022, although at that time there were still problems related to the practical implementation of silent payments and its possible incompatibility with protocols like CoinJoin, which the developers took care of fixing.