Re: [bitcoin-dev] Silent Payments – Non-interactive private payments with no on-chain overhead

[Billy <fresheneesz@gmail.com>]

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>  the sender can get in trouble too if they send money

Good point.

> how well this can be optimized without resorting to reducing anonymity

Complete shot in the dark, but I wonder if something akin to compact block
filters could be done to support this case. If, for example, the tweaked
key were defined without hashing, I think something like that could be done:

X'  =  i*X*G + X  =  x*I*G + X

Your compact-block-filter-like things could then store a set of each `item =
{recipient: X' % N, sender: I%N}`, and a light client would download this
data and do the following to detect a likely payment for each filter item:

item.recipient - X%N == x*item.sender*G

You can then scale N to the proper tradeoff between filter size and false
positives. I suppose this might make it possible to deprivitize a tweaked
key by checking to see what non-tweaked keys evenly divide it. Perhaps
that's what hashing was being used to solve. What if we added the shared
diffie hellman secret modulo N to remove this correlation:

X' = i*X*G + X + (i*X)%N =  x*I*G + X + (x*I)%N

Then for each `item = {recipient: X' % N, sender: I%N}`, we detect via
`item.recipient - X%N == x*item.sender*(1+G)`. Is my math right here? I'm
thinking this should work because (a+b%N)%N == (a%N + b%N)%N.



On Tue, Mar 29, 2022 at 10:36 AM Ruben Somsen <rsomsen@gmail.com> wrote:

> Hi Billy,
>
> Thanks for taking a look.
>
> >Maybe it would have been more accurate to say no *extra* on chain overhead
>
> I can see how it can be misinterpreted. I updated the gist to be more
> specific.
>
> >primary benefit of this is privacy for the recipient
>
> Fair, but just wanted to note the sender can get in trouble too if they
> send money to e.g. blacklisted addresses.
>
> >there could be a standard that [...] reduces the anonymity set a bit
>
> This has occurred to me but I am reluctant to make that trade-off. It
> seems best to first see how well this can be optimized without resorting to
> reducing anonymity, and it's hard to analyze exactly how impactful the
> anonymity degradation is (I suspect it's worse than you think because it
> can help strengthen existing heuristics about output ownership).
>
> Cheers,
> Ruben
>
>
>
> On Tue, Mar 29, 2022 at 4:57 PM Billy <fresheneesz@gmail.com> wrote:
>
>> Hi Ruben,
>>
>> Very interesting protocol. This reminds me of how monero stealth
>> addresses work, which gives monero the same downsides regarding light
>> clients (among other things). I was a bit confused by the following:
>>
>> > without requiring any interaction or on-chain overhead
>>
>> After reading through, I have to assume it was rather misleading to say
>> "no on-chain overhead". This still requires an on-chain transaction to be
>> sent to the tweaked address, I believe. Maybe it would have been more
>> accurate to say no *extra* on chain overhead (over a normal transaction)?
>>
>> It seems the primary benefit of this is privacy for the recipient. To
>> that end, it seems like a pretty useful protocol. It's definitely a level
>> of privacy one would only care about if they might receive a lot money
>> related to that address. However of course someone might not know they'll
>> receive an amount of money they want to be private until they receive it.
>> So the inability to easily do this without a full node is slightly less
>> than ideal. But it's another good reason to run a full node.
>>
>> Perhaps there could be a standard that can identify tweaked address, such
>> that only those addresses can be downloaded and checked by light clients.
>> It reduces the anonymity set a bit, but it would probably still be
>> sufficient.
>>
>>
>>
>> On Mon, Mar 28, 2022, 10:29 Ruben Somsen via bitcoin-dev <
>> bitcoin-dev@lists.linuxfoundation.org> wrote:
>>
>>> Hi all,
>>>
>>> I'm publishing a new scheme for private non-interactive address
>>> generation without on-chain overhead. It has upsides as well as downsides,
>>> so I suspect the main discussion will revolve around whether this is worth
>>> pursuing or not. There is a list of open questions at the end.
>>>
>>> I added the full write-up in plain text below, though I recommend
>>> reading the gist for improved formatting and in order to benefit from
>>> potential future edits:
>>> https://gist.github.com/RubenSomsen/c43b79517e7cb701ebf77eec6dbb46b8
>>>
>>> Cheers,
>>> Ruben
>>>
>>>
>>>
>>> Silent Payments
>>>
>>> Receive private payments from anyone on a single static address without
>>> requiring any interaction or on-chain overhead
>>>
>>>
>>>
>>> OVERVIEW
>>>
>>>
>>> The recipient generates a so-called silent payment address and makes it
>>> publicly known. The sender then takes a public key from one of their chosen
>>> inputs for the payment, and uses it to derive a shared secret that is then
>>> used to tweak the silent payment address. The recipient detects the payment
>>> by scanning every transaction in the blockchain.
>>>
>>> Compared to previous schemes[1], this scheme avoids using the Bitcoin
>>> blockchain as a messaging layer[2] and requires no interaction between
>>> sender and recipient[3] (other than needing to know the silent payment
>>> address). The main downsides are the scanning requirement, the lack of
>>> light client support, and the requirement to control your own input(s). An
>>> example use case would be private one-time donations.
>>>
>>> While most of the individual parts of this idea aren’t novel, the
>>> resulting protocol has never been seriously considered and may be
>>> reasonably viable, particularly if we limit ourselves to detecting only
>>> unspent payments by scanning the UTXO set. We’ll start by describing a
>>> basic scheme, and then introduce a few improvements.
>>>
>>>
>>>
>>> BASIC SCHEME
>>>
>>>
>>> The recipient publishes their silent payment address, a single 32 byte
>>> public key:
>>> X = x*G
>>>
>>> The sender picks an input containing a public key:
>>> I = i*G
>>>
>>> The sender tweaks the silent payment address with the public key of
>>> their input:
>>> X' = hash(i*X)*G + X
>>>
>>> Since i*X == x*I (Diffie-Hellman Key Exchange), the recipient can detect
>>> the payment by calculating hash(x*I)*G + X for each input key I in the
>>> blockchain and seeing if it matches an output in the corresponding
>>> transaction.
>>>
>>>
>>>
>>> IMPROVEMENTS
>>>
>>>
>>> UTXO set scanning
>>>
>>> If we forgo detection of historic transactions and only focus on the
>>> current balance, we can limit the protocol to only scanning the
>>> transactions that are part of the UTXO set when restoring from backup,
>>> which may be faster.
>>>
>>> Jonas Nick was kind enough to go through the numbers and run a benchmark
>>> of hash(x*I)*G + X on his 3.9GHz Intel® Core™ i7-7820HQ CPU, which took
>>> roughly 72 microseconds per calculation on a single core. The UTXO set
>>> currently has 80 million entries, the average transaction has 2.3 inputs,
>>> which puts us at 2.3*80000000*72/1000/1000/60 = 221 minutes for a single
>>> core (under 2 hours for two cores).
>>>
>>> What these numbers do not take into account is database lookups. We need
>>> to fetch the transaction of every UTXO, as well as every transaction for
>>> every subsequent input in order to extract the relevant public key,
>>> resulting in (1+2.3)*80000000 = 264 million lookups. How slow this is and
>>> what can be done to improve it is an open question.
>>>
>>> Once we’re at the tip, every new unspent output will have to be scanned.
>>> It’s theoretically possible to scan e.g. once a day and skip transactions
>>> with fully spent outputs, but that would probably not be worth the added
>>> complexity. If we only scan transactions with taproot outputs, we can
>>> further limit our efforts, but this advantage is expected to dissipate once
>>> taproot use becomes more common.
>>>
>>>
>>> Variant using all inputs
>>>
>>> Instead of tweaking the silent payment address with one input, we could
>>> instead tweak it with the combination of all input keys of a transaction.
>>> The benefit is that this further lowers the scanning cost, since now we
>>> only need to calculate one tweak per transaction, instead of one tweak per
>>> input, which is roughly half the work, though database lookups remain
>>> unaffected.
>>>
>>> The downside is that if you want to combine your inputs with those of
>>> others (i.e. coinjoin), every participant has to be willing to assist you
>>> in following the Silent Payment protocol in order to let you make your
>>> payment. There are also privacy considerations which are discussed in the
>>> “Preventing input linkage” section.
>>>
>>> Concretely, if there are three inputs (I1, I2, I3), the scheme becomes:
>>> hash(i1*X + i2*X + i3*X)*G + X == hash(x*(I1+I2+I3))*G + X.
>>>
>>>
>>> Scanning key
>>>
>>> We can extend the silent payment address with a scanning key, which
>>> allows for separation of detecting and spending payments. We redefine the
>>> silent payment address as the concatenation of X_scan, X_spend, and
>>> derivation becomes X' = hash(i*X_scan)*G + X_spend. This allows your
>>> internet-connected node to hold the private key of X_scan to detect
>>> incoming payments, while your hardware wallet controls X_spend to make
>>> payments. If X_scan is compromised, privacy is lost, but your funds are not.
>>>
>>>
>>> Address reuse prevention
>>>
>>> If the sender sends more than one payment, and the chosen input has the
>>> same key due to address reuse, then the recipient address will also be the
>>> same. To prevent this, we can hash the txid and index of the input, to
>>> ensure each address is unique, resulting in X' = hash(i*X,txid,index)*G +
>>> X. Note this would make light client support harder.
>>>
>>>
>>>
>>> NOTEWORTHY DETAILS
>>>
>>>
>>> Light clients
>>>
>>> Light clients cannot easily be supported due to the need for scanning.
>>> The best we could do is give up on address reuse prevention (so we don’t
>>> require the txid and index), only consider unspent taproot outputs, and
>>> download a standardized list of relevant input keys for each block over
>>> wifi each night when charging. These input keys can then be tweaked, and
>>> the results can be matched against compact block filters. Possible, but not
>>> simple.
>>>
>>>
>>> Effect on BIP32 HD keys
>>>
>>> One side-benefit of silent payments is that BIP32 HD keys[4] won’t be
>>> needed for address generation, since every address will automatically be
>>> unique. This also means we won’t have to deal with a gap limit.
>>>
>>>
>>> Different inputs
>>>
>>> While the simplest thing would be to only support one input type (e.g.
>>> taproot key spend), this would also mean only a subset of users can make
>>> payments to silent addresses, so this seems undesirable. The protocol
>>> should ideally support any input containing at least one public key, and
>>> simply pick the first key if more than one is present.
>>>
>>> Pay-to-(witness-)public-key-hash inputs actually end up being easiest to
>>> scan, since the public key is present in the input script, instead of the
>>> output script of the previous transaction (which requires one extra
>>> transaction lookup).
>>>
>>>
>>> Signature nonce instead of input key
>>>
>>> Another consideration was to tweak the silent payment address with the
>>> signature nonce[5], but unfortunately this breaks compatibility with MuSig2
>>> and MuSig-DN, since in those schemes the signature nonce changes depending
>>> on the transaction hash. If we let the output address depend on the nonce,
>>> then the transaction hash will change, causing a circular reference.
>>>
>>>
>>> Sending wallet compatibility
>>>
>>> Any wallet that wants to support making silent payments needs to support
>>> a new address format, pick inputs for the payment, tweak the silent payment
>>> address using the private key of one of the chosen inputs, and then proceed
>>> to sign the transaction. The scanning requirement is not relevant to the
>>> sender, only the recipient.
>>>
>>>
>>>
>>> PREVENTING INPUT LINKAGE
>>>
>>>
>>> A potential weakness of Silent Payments is that the input is linked to
>>> the output. A coinjoin transaction with multiple inputs from other users
>>> can normally obfuscate the sender input from the recipient, but Silent
>>> Payments reveal that link. This weakness can be mitigated with the “variant
>>> using all inputs”, but this variant introduces a different weakness – you
>>> now require all other coinjoin users to tweak the silent payment address,
>>> which means you’re revealing the intended recipient to them.
>>>
>>> Luckily, a blinding scheme[6] exists that allows us to hide the silent
>>> payment address from the other participants. Concretely, let’s say there
>>> are two inputs, I1 and I2, and the latter one is ours. We add a secret
>>> blinding factor to the silent payment address, X + blinding_factor*G = X',
>>> then we receive X1' = i1*X' (together with a DLEQ to prove correctness, see
>>> full write-up[6]) from the owner of the first input and remove the blinding
>>> factor with X1' - blinding_factor*I1 = X1 (which is equal to i1*X).
>>> Finally, we calculate the tweaked address with hash(X1 + i2*X)*G + X. The
>>> recipient can simply recognize the payment with hash(x*(I1+I2))*G + X. Note
>>> that the owner of the first input cannot reconstruct the resulting address
>>> because they don’t know i2*X.
>>>
>>> The blinding protocol above solves our coinjoin privacy concerns (at the
>>> expense of more interaction complexity), but we’re left with one more issue
>>> – what if you want to make a silent payment, but you control none of the
>>> inputs (e.g. sending from an exchange)? In this scenario we can still
>>> utilize the blinding protocol, but now the third party sender can try to
>>> uncover the intended recipient by brute forcing their inputs on all known
>>> silent payment addresses (i.e. calculate hash(i*X)*G + X for every publicly
>>> known X). While this is computationally expensive, it’s by no means
>>> impossible. No solution is known at this time, so as it stands this is a
>>> limitation of the protocol – the sender must control one of the inputs in
>>> order to be fully private.
>>>
>>>
>>>
>>> COMPARISON
>>>
>>>
>>> These are the most important protocols that provide similar
>>> functionality with slightly different tradeoffs. All of them provide fresh
>>> address generation and are compatible with one-time seed backups. The main
>>> benefits of the protocols listed below are that there is no scanning
>>> requirement, better light client support, and they don’t require control
>>> over the inputs of the transaction.
>>>
>>>
>>> Payment code sharing
>>>
>>> This is BIP47[2]. An OP_RETURN message is sent on-chain to the recipient
>>> to establish a shared secret prior to making payments. Using the blockchain
>>> as a messaging layer like this is generally considered an inefficient use
>>> of on-chain resources. This concern can theoretically be alleviated by
>>> using other means of communicating, but data availability needs to be
>>> guaranteed to ensure the recipient doesn’t lose access to the funds.
>>> Another concern is that the input(s) used to establish the shared secret
>>> may leak privacy if not kept separate.
>>>
>>>
>>> Xpub sharing
>>>
>>> Upon first payment, hand out an xpub instead of an address in order to
>>> enable repeat payments. I believe Kixunil’s recently published scheme[3] is
>>> equivalent to this and could be implemented with relative ease. It’s
>>> unclear how practical this protocol is, as it assumes sender and recipient
>>> are able to interact once, yet subsequent interaction is impossible.
>>>
>>>
>>> Regular address sharing
>>>
>>> This is how Bitcoin is commonly used today and may therefore be obvious,
>>> but it does satisfy similar privacy requirements. The sender interacts with
>>> the recipient each time they want to make a payment, and requests a new
>>> address. The main downside is that it requires interaction for every single
>>> payment.
>>>
>>>
>>>
>>> OPEN QUESTIONS
>>>
>>>
>>> Exactly how slow are the required database lookups? Is there a better
>>> approach?
>>>
>>> Is there any way to make light client support more viable?
>>>
>>> What is preferred – single input tweaking (revealing an input to the
>>> recipient) or using all inputs (increased coinjoin complexity)?
>>>
>>> Are there any security issues with the proposed cryptography?
>>>
>>> In general, compared to alternatives, is this scheme worth the added
>>> complexity?
>>>
>>>
>>>
>>> ACKNOWLEDGEMENTS
>>>
>>>
>>> Thanks to Kixunil, Calvin Kim, and Jonas Nick, holihawt and Lloyd
>>> Fournier for their help/comments, as well as all the authors of previous
>>> schemes. Any mistakes are my own.
>>>
>>>
>>>
>>> REFERENCES
>>>
>>>
>>> [1] Stealth Payments, Peter Todd:
>>> https://github.com/genjix/bips/blob/master/bip-stealth.mediawiki ↩︎
>>>
>>> [2] BIP47 payment codes, Justus Ranvier:
>>> https://github.com/bitcoin/bips/blob/master/bip-0047.mediawiki
>>>
>>> [3] Reusable taproot addresses, Kixunil:
>>> https://gist.github.com/Kixunil/0ddb3a9cdec33342b97431e438252c0a
>>>
>>> [4] BIP32 HD keys, Pieter Wuille:
>>> https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki
>>>
>>> [5] 2020-01-23 ##taproot-bip-review, starting at 18:25:
>>> https://gnusha.org/taproot-bip-review/2020-01-23.log
>>>
>>> [6] Blind Diffie-Hellman Key Exchange, David Wagner:
>>> https://gist.github.com/RubenSomsen/be7a4760dd4596d06963d67baf140406
>>> _______________________________________________
>>> bitcoin-dev mailing list
>>> bitcoin-dev@lists.linuxfoundation.org
>>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>>
>>

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