Author: Peter Todd 2014-01-06 02:53:12
Published on: 2014-01-06T02:53:12+00:00
The given context is a technical description of Bitcoin wallets and how they maintain transaction outputs while preserving privacy. The set of all transactions associated with scriptPubKeys in the wallet is kept up-to-date without scanning the blockchain for relevant data, which is essential for scalability, efficiency, and privacy. However, syncing a wallet can leak information about coins owned, making it vulnerable to internal and global attackers. The article discusses a threat model and goals to preserve privacy against such attacks. Basic functionalities of spending funds, receiving new funds, detecting unauthorized spends, and detecting confirmation are explained. Scalability and efficiency are improved by spreading work across multiple nodes at both per-block and within-block levels. Deterministic wallets using BIP32 or similar technology have become popular due to their simple backup model. Bloom filters, prefix filters, and cryptographically blinded schemes are explored as query schemes, while correlation attacks and DoS attacks are addressed. Address use, management, and generation are discussed to solve the problem of users expecting quick notifications of new transactions paying any address generated by their wallet while maintaining privacy. The article aims to provide a comprehensive understanding of Bitcoin wallets and their functioning.
Updated on: 2023-06-07T23:29:31.884426+00:00