First off, nice article. Very clear and informative.

I don't know if this is the best place to post this, but it seems related to me.

As more wallets implement BIP32, I believe that bitcoin wallets should begin to encourage people to use https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki#recurrent-business-to-business-transactions-mi0 style address instead of traditional addresses. In the end, this would improve privacy because users never need to merge coin if they had one of these "super addresses".

In addition, "super addresses" would fit nicely into BIP70. Right now, the PaymentDetails message allows the merchant to provide multiple outputs. If instead the PaymentDetails provide 1 traditional output (for reverse compatibility) and 1 "super address", the payment could be broken into as many pieces as is needed to match unspent outputs already in the customers wallet. Finally, the refund_to address in Payment could also be upgraded to a "super address" to enhance privacy there.

I am not sure if there is a large memory requirement for "super addresses", but to me, it seems that a lot of these privacy enhancing possibilities will be simple to implement once BIP32 is widely deployed.


On Thu, Dec 12, 2013 at 11:03 AM, Mike Hearn <mike@plan99.net> wrote:
I wrote an article intended for a broad/non-developer audience on a few Bitcoin privacy topics:

- P2P connection encryption
- Address re-use/payment protocol
- CoinJoin and merge avoidance

I don't think there's anything much new here for people who were involved with the BIP70 design discussions, but it may prove a useful resource when talking about privacy features in the payment protocol. Specifically the ability to request multiple outputs and submit multiple transactions that satisfy them. The article elaborates on how to use that feature to achieve some useful privacy outcomes.

I also analyze what using SSL for P2P connections would buy us and what it wouldn't.

https://medium.com/p/7f95a386692f

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