What is the best way to get receiver privacy on lightning?
Lets say with the example scenario where you want to receive from a boltz swap for example. Is it to use bolt12 with CLN, or a zeus embedded node? Blinded paths? Lnproxy?
I'm trying to gauge the current best practices for this usecase.
You can always buy a channel using ecash from a channel provider to your node... Have a VPN and/or run the node over tor. You will have no outbound liquidity then but that's OK. Then you can send a utxo or liquid to boltz then the boltz swap can 'pay' your lightning channel you bought/rented with the ecash.
Then just close the channel... The utxo from that what I understand has zero connection to you, you were using a VPN and now you have a random utxo that doesn't leak your IP or identity beyond the minimum.
Or at least that's my understanding but I am not an expert it depends on your exact situation
Short answer: create a BOLT11 invoice with blinded paths and wrap it with lnproxy.
Be careful with BOLT12 on CLN! If it doesn't find a suitable "blinded path" with nodes that support routing BOLT12 messages, it will default to your nodes pubkey! I was very surprised to experience this... You can double check by decoding the invoice and checking that your pubkey is not there.
And then a custodial option but with probably the best privacy, cashu. But that's another topic...
You might be interested on #1494067 and #1495707.
Bolt 12 is a good alternative for a good privacy.
https://knowingbitcoin.com/lightning-invoices-bolt11-bolt12/
And you can use Bull Bitcoin wallet for swap. Very good privacy tools.
https://www.bullbitcoin.com/blog/bull-by-bull-bitcoin
You can encode a bolt11 invoice (supported everywhere) in such a way that it gives you deniability that you received the payment.
https://lightningdevkit.org/blog/introducing-phantom-node-payments/
This is for load balancing between several public nodes by including route hints for all the nodes in the invoice. How would that give you deniability that you recieved a payment?
private channel from an LSP should do it.. use alby hub on your own computer behind a VPN...
any advice on wallet compatibility? I am seeing a lot of wallets struggle with blinded paths.
Do you have a list of wallets you've confirmed are compliant?
LND based wallets should generally work well with it, ShockWallet Zeus and Blixt afaik all use LND
I believe other implementations support it but are probably not as stable since they have smaller ecosystems
Swap based wallets using Ark/Spark etc have extra overhead so unsure
Blinded path invoices are not QR friendly just because the extra data in the QR can make it hard to scan, they're best used as a string
Sounds like we need to start demanding compatibility for them. Receiver privacy is really important.
I used Phoenix and it got stumped. That team usually crushes it and supports BOLT12 so hopefully they'll address the deficiency.
Excellent comment – that’s really helpful. Thank you
LND does not respect privacy.
It permanently logs all payments (inc. routed payments) by default.
Bolt 12 using CoinOS.