RFC for BIP: Derivation scheme for P2WPKH-nested-in-P2SH based accounts



Summary:

The discussion on the bitcoin-dev mailing list centered around the privacy concerns regarding change outputs. One suggestion was to always use the same output type for change output, if the wallet is able to recognize it. However, this method may still result in a privacy leak if there is only one P2PKH output and someone knows the algorithm being used. Another suggestion was to pick a change output at random, mimicking one of the sending outputs. This would increase privacy, but it's not perfect. To further enhance privacy, the redeemscript/witnessscript template should also be matched.


Updated on: 2023-06-11T05:41:51.444923+00:00