bitgould on Nostr: What is Payjoin V2, why do we need it now, and how does it make payjoin so much ...
What is Payjoin V2, why do we need it now, and how does it make payjoin so much easier to support?
Basic #bitcoin transactions are non-interactive. An address is all a sender needs to send bitcoin.
The trade off is that only the sender can contribute inputs that the receiver must consolidate later, and third parties assume all transaction inputs come from just one sender.
Payjoin peers instead interact before they broadcast a transaction. That way they both can spend inputs in a batch. Batch transactions share fixed fees and save money. They break probability analysis used to track bitcoin.
However, V1 receivers must host a server online.
Payjoin V2 peers may go on and offline and still make a payjoin. V2 lets even web wallets receive payjoin any time to optimize for fees and default to better privacy.
An oblivious third-party directory hosts a server instead. The directory can't steal or even see peer IP addresses.
Oblivious HTTP keeps IP addresses private. It works like Tor with just 2 hops on a pre-defined route.
The OHTTP Relay just sees encapsulated requests.
The Payjoin Directory sees requests without Client IPs.
The Directory can't see request PSBT contents. They're encrypted too.
Payjoin V2 keeps message contents private between sender and receiver without involving a certificate authority. The Payjoin Directory cannot see transaction details.
Hybrid Public Key Encryption makes end-to-end authenticated encryption with tools already native to Bitcoin.
Payjoin only works when we choose to support it. Join me by paying this knowledge forward.
Special thanks to BitDevs NYC for giving these slides their first audience.
Basic #bitcoin transactions are non-interactive. An address is all a sender needs to send bitcoin.
The trade off is that only the sender can contribute inputs that the receiver must consolidate later, and third parties assume all transaction inputs come from just one sender.
Payjoin peers instead interact before they broadcast a transaction. That way they both can spend inputs in a batch. Batch transactions share fixed fees and save money. They break probability analysis used to track bitcoin.
However, V1 receivers must host a server online.
Payjoin V2 peers may go on and offline and still make a payjoin. V2 lets even web wallets receive payjoin any time to optimize for fees and default to better privacy.
An oblivious third-party directory hosts a server instead. The directory can't steal or even see peer IP addresses.
Oblivious HTTP keeps IP addresses private. It works like Tor with just 2 hops on a pre-defined route.
The OHTTP Relay just sees encapsulated requests.
The Payjoin Directory sees requests without Client IPs.
The Directory can't see request PSBT contents. They're encrypted too.
Payjoin V2 keeps message contents private between sender and receiver without involving a certificate authority. The Payjoin Directory cannot see transaction details.
Hybrid Public Key Encryption makes end-to-end authenticated encryption with tools already native to Bitcoin.
Payjoin only works when we choose to support it. Join me by paying this knowledge forward.
Special thanks to BitDevs NYC for giving these slides their first audience.