Phoenix Wallet Privacy TradeOffs \ stacker news ~lightning

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Phoenix Wallet Privacy TradeOffs

614 sats \ 16 comments \ @02b58a1376 26 Jan lightning

Hi everyone,

noob here.

Which privacy trade-offs do I have by using Phoenix?

If I understood well only the amount and next hop (but not final destination) are known to ACINQ node right?

Same if I am receiving a payment, right? Only previous hop and final amount?

Metadata and everything else is unknown to ACINQ, right?

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10 sats \ 6 replies \ @ek 26 Jan

The current version of Phoenix offers no advantage regarding privacy over existing, hosted, custodial wallets. We (ACINQ) know the final destination and amount of payments.

source

Not sure if that’s up-to-date but I assume it’s so.

Same if I am receiving a payment, right? Only previous hop and final amount?

How do you imagine this would work? Of course they know the next and final hop when you receive payments since they need to forward it.

10 sats \ 5 replies \ @megaptera 26 Jan

I think this is out-of-date information as you now run you own node with phoenix on your phone. Your quote is from 2019 if you look at the comments here:

Later versions will be much more privacy friendly, but that's in the works. More details https://acinq.co/blog/introducing-phoenix-trampoline.

0 sats \ 4 replies \ @ek 26 Jan

I think Phoenix was always running a node to be self-custodial. However, to the extent of my knowledge, it doesn’t calculate the full route on your device but uses trampoline routing and I think it only uses @ACINQ’s node as the trampoline node for now (and not multiple) since the trampoline routing specs are still WIP. This would mean they know everything about your payments.

Again, not sure if that’s still the case. I’ll send them a mail to clarify here. I don’t expect them to check their SN notifications.

44 sats \ 3 replies \ @nout 26 Jan

I wonder if there's a difference in terms of privacy while using BOLT12 in Phoenix in 3 different scenarios

Phoenix sending to another Phoenix BOLT12 offer code
Phoenix sending to a different wallet via BOLT12 offer code
Another wallet sending to Phoenix BOLT12 offer code

(I also wonder if there are privacy differences based on how you use the BOLT12 in Phoenix, because there are 3 formats - human readable address (the thing that looks like lightning adress), the payment code and full URI)

0 sats \ 2 replies \ @ek 26 Jan

Good questions, hopefully @ACINQ will see my email and reply tomorrow during business hours

10 sats \ 1 reply \ @OT 6h

Since everything is passing through their side of the channel I'd bet it's not the best privacy focused wallet.

0 sats \ 0 replies \ @ek 6h

It's possible to hide the destination with trampoline routing but I think amounts would still be revealed.

You could also calculate the route on the device but that requires more resources:

This is advantageous for lightweight LN clients that aren’t able to track the full network graph because they’re often offline or run on underpowered mobile hardware.

Privacy of receiving payments in such a setup is an issue though afaict.

2 sats \ 0 replies \ @dingding541 26 Jan

Ask @DarthCoin

0 sats \ 0 replies \ @ACINQ 2h

Hello,

For sending:

Trampoline routing delegates route calculation to the ACINQ node, which is how it learns the amount and destination of BOLT 11 payments.

With BOLT 12 and the support of blinded routes, ACINQ doesn't learn the destination node anymore. However, only a handful of wallets support BOLT 12 at the moment.

For backwards-compatibility, we need to keep allowing paying wallets with BOLT 11 invoices, which is why we left the privacy notice as-is. Once the whole ecosystem migrates to BOLT 12, then this privacy issue will be fixed for good.

For receiving:

ACINQ doesn't know the origin node. It knows the destination Phoenix node and the amount.

In the case of Phoenix->Phoenix payments, ACINQ will always know the origin and destination node, and the amount, even with BOLT 12.

Finally, note that a Lightning node id is much less persistent than an on-chain address, except for routing Lightning nodes with publicly announced channels.

0 sats \ 0 replies \ @BTCLNAT 26 Jan

Even today, ACINQ acknowledges that there has to be "some degree of trust" when working with the Phoenix wallet. It even explains that if you want to connect to a node other than ACINQ, you must use a different wallet since Phoenix is not intended for advanced users.

You can find all the answers at this link

https://phoenix.acinq.co/faq

0 sats \ 5 replies \ @DarthCoin 26 Jan

none

0 sats \ 4 replies \ @ek 26 Jan

wrong again 👀

0 sats \ 3 replies \ @DarthCoin 26 Jan

please find me using a phoenix wallet

10 sats \ 2 replies \ @ek 26 Jan

Please find my bank transfer. Oh you can’t? Must be private then.

0 sats \ 1 reply \ @DarthCoin 26 Jan

bank transfers have attwched real names. bitcoin wallets don't. is kind of stupid to compare them.

0 sats \ 0 replies \ @ek 26 Jan

Point taken