Author: Zac Greenwood 2021-08-31 14:09:04
Published on: 2021-08-31T14:09:04+00:00
The email exchange between Zac and ZmnSCPxj discusses the privacy implications of a proposal that would require a new type of transaction and encumbered change outputs. ZmnSCPxj explains that this proposal would reduce privacy by decreasing the anonymity set for everyone, making payment and change output identifiable, and requiring visible on-chain specifics regarding how the output is encumbered. However, Zac is not sure if there are technical solutions to these issues. He suggests that the functionality should not justify the privacy reductions unless these can be addressed. ZmnSCPxj provides more details about the implementation challenges, including the need for explicit flagging and data storage with each output. Explicit flagging is bad for privacy because it reduces anonymity, and data storage increases the size of stored outputs. Moreover, the residual limit needs to be kept with the output, which requires explicit tagging. These challenges make implementing the proposal without consensus code changes difficult, and dropping the "change outputs must also be rate-limited" requirement could improve privacy and make implementation easier.
Updated on: 2023-06-15T00:28:32.414867+00:00