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16 sats \ 1 reply \ @ChrisS 19 May 2024 \ on: What's all this about Silent Payments? bitcoin_beginners
"Do you think these could these be used for privacy enhancing transactions that have inputs of KYC'd UTXOs? it seems like it to me."
Are you saying that if you have a kyc utxo and you send it to a silent payment address it breaks the link between the utxos? If so could you explain in more detail?
My understanding is that this is a good tool to replace HD wallets with a few tradeoffs like the need to constantly scan new taproot transactions for incoming payments. I'm not convinced it does what you describe in point 3. It would be interesting if it did.
tool to replace HD wallets
I think it depends on HD wallets (BIP32)
Key Derivation
Two keys are needed to create a silent payments address: the spend key and the scan key. To ensure compatibility, wallets MAY use BIP32 derivation with the following derivation paths for the spend and scan key. When using BIP32 derivation, wallet software MUST use hardened derivation[19] for both the spend and scan key.
A scan and spend key pair using BIP32 derivation are defined (taking inspiration from BIP44) in the following manner:
scan_private_key: m / purpose' / coin_type' / account' / 1' / 0
spend_private_key: m / purpose' / coin_type' / account' / 0' / 0
purpose is a constant set to 352 following the BIP43 recommendation. Refer to BIP43 and BIP44 for more details.
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