Privacy issues with proof of payment



Summary:

The writer expresses concern over the privacy implications of signed invoices and proof-of-payment mechanisms on the Lightning network. While such evidence could be useful for dispute settlement, sensitive transactions should also be possible without negative consequences. Node IDs can act as pseudonyms, but creating a new node for every transaction would be impractical. Additionally, some transactions are inherently tied to physical identity, making it difficult to maintain anonymity. The writer suggests having multiple nodes - one tied to physical ID and one or more virtual identities - to transfer funds between them without outsiders receiving payment information. The writer asks whether proof of payment should be optional, whether its strength should be reduced, and whether bi-directional routing is useful. Overall, the writer believes that privacy concerns must be taken into account in the design of the Lightning network.


Updated on: 2023-05-24T21:09:23.888510+00:00