The release of the Silentium wallet has brought attention to Silent Payments addresses: a convenient method to avoid address reuse.
Despite the protocol allowing it, reusing Bitcoin addresses leads to a significant erosion of one’s privacy.
Proposed in 2022 by Ruben Somsen and the developer josibake through BIP-352, Silent Payments represent a new approach to Bitcoin addresses, potentially offering greater privacy for on-chain transactions.
Silent Payments allow the recipient of a transaction to share only a single reusable address while receiving each individual on-chain payment to a different address, thereby avoiding address reuse.
In this way, the recipient of a payment can generate and share a single Silent Payments address.
Example of an SP address: sp1qqf74m02lzwvk4kskmzn3kcgzkyy2ud6n70m8avgruc7e72yczft22q3t6tpl5hnpslzrlpn874yevunn3ju88dy2m5r8t3gem5zd5wgreq3v9c4v
Currently, Silent Payments are supported by the Silentium wallet, released on May 15th by developer Louis Singer, and by the multicoin wallet Cake Wallet.
How do Silent Payments work?
The recipient creates an SP address and shares it with the sender. This address is never used directly in transactions but serves as the basis for generating a new unique on-chain address for each payment. The sender uses the recipient’s SP address to generate a new public address, utilizing a combination of public and private keys and a series of cryptographic functions.
This unique address appears exactly like any other Taproot address, preventing an external observer from knowing whether a Silent Payment has been used.
The advantages
- Convenience: SPs make it easier to use a unique address for each transaction, especially for entities that receive many payments such as businesses or e-commerce; they do not require a web server, making them useful for donations or similar use cases;
- Increased privacy: transactions cannot be linked to an SP address by an external observer;
- No interaction between sender and recipient: unlike other transactions aimed at improving user privacy, Silent Payments do not require interaction between the sender and the recipient.
The limitations
- Computational Cost: using complex cryptographic techniques, the recipient needs to continuously scan the timechain to identify received payments, which can require significant computational resources, especially for users with a high volume of transactions.
The community’s reactions
In addition to the compliments for the launch of the Silentium wallet, there have also been some criticisms from some Bitcoin community users.
Addressing Silentium developer Louis Singer, Pavol Rusnak, co-founder of Satoshi Labs, wrote:
Nicolas Dorier, creator of BTCPay Server, has commented:
