Interactive Payment Batching w/ Payjoin

Summary:

The article delves into the use of payjoin P2EP to coordinate payment batches and optimize blockspace while reducing fee expenditure. Payjoin refers to both an interactive way of building transactions between peers on the web, as well as a transaction structure that breaks the assumption that all transaction inputs belong to the same person. The post highlights how payjoin can reduce fee expenditure and blockchain throughput while preserving privacy for transactions.The post also discusses the use of payjoin payment output substitution (`pjos`) to prevent address reuse, redirect funds to cold storage, forward payments, and batch transactions for massive fee savings. For instance, Bob the receiver can substitute a proposed output with any outputs of equal amount, spreading the inbound amount across multiple addresses for batching and saving mining fees. Furthermore, the article emphasizes the use of payjoin and batch transactions in achieving greater privacy and fungibility in Bitcoin transactions. Payjoin enables intra-transaction transfers between parties to create ambiguity, breaking heuristic analysis done by trackers. Meanwhile, batch transactions allow multiple parties to combine inputs and consolidate funds without a mixing step, preserving Bitcoin's inherent fungibility and allowing for multiple ambiguous possibilities to converge. However, there are still potential privacy concerns as parties can know the subtransactions of their counterpart, and an adversarial counterparty could report chosen inputs and outputs to build a cluster with an analysis firm. Despite this, payjoin and batch transactions represent a significant step forward in achieving greater privacy and fungibility in Bitcoin transactions. Lastly, the post concludes by noting that even lightning channel payjoin outputs are viable. This helps to preserve privacy because they belong to the lightning channels and not directly to the participants.

Updated on: 2023-06-01T16:51:55.258583+00:00