ZK-gossip for lightning channel announcements

The discussion revolves around enhancing privacy within the Lightning Network (LN) protocol by considering a shift from the current model, which requires the possession of a channel opening unspent transaction output (utxo) as a gate to access certain network features, towards utilizing a Zero-Knowledge Proof (ZKP) of possession of such utxos. This change aims at improving user privacy by making it unnecessary to directly reveal ownership of a specific channel's utxo. The existing mechanism primarily serves as a deterrent against spamming by attaching a cost to the action of channel creation or utxo generation, thus implicitly allowing any utxo to fulfill this role, not necessarily one tied to a channel.

Further analysis suggests that since creating a standard utxo incurs the same cost as establishing a channel, there's an open consideration to move away from strictly using channel-related utxos in negotiations. In light of adopting taproot technology, which obscures the distinction between different types of utxos in successful transactions, the conversation shifts towards exploring the viability of employing single signature (sig) generated cases for these operations. This approach aligns with the objective of not disclosing the precise amounts within channels, where suggestions like employing multipliers or ranges have been tabled to mask the actual values involved, aiming to preserve privacy.

However, an economic perspective introduces a slight contradiction to the privacy-centric approach, as highlighted by Matt Corallo's point on leveraging the economic value of M*N worth of channels for a single N utxo. The underlying concern is that completely avoiding the use of channel utxos in proofs may not be economically sound, despite the privacy benefits it offers. This leads to a tentative conclusion that support for MuSig2, a signature scheme, might still be necessary within the ZKP framework to feasibly integrate channel utxos without compromising on economic rationality or privacy objectives. The dialogue reflects ongoing deliberation over balancing economic efficiency with privacy enhancements in the LN protocol's evolution.